HELPING HAND
Martin Lewis warns thousands of Brits are missing out on free help with childcare costs – here’s how you can cash in
MARTIN Lewis has warned thousands of Brits are missing out on free help with childcare costs - and he explained how you can cash in.
The money-saving expert said a whopping 800,000 people are eligible for tax-free childcare but it's "massively underclaimed".
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Under the scheme parents can get up to £500 every three months - up to a maximum of £2,000 a year - for each of their children to help with the costs of childcare.
There is a criteria they must meet - like earning a certain amount of money over a three-month period.
Speaking on his Budget special last night, Martin said: "(It's) massively underclaimed - 800,000 of you who aren't entitled to any of the other things are entitled to this.
"It's for the employed and the self-employed.
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"For every 80p you put in, the state adds 20p up to £2,000 a year.
"It's for children of a maximum age 11 - or 16 with disabilities who get £4,000 a year."
To receive the tax-free benefit you need to create an
For every £8 you pay into this account, the government will add £2 which you can use to pay your approved provider.
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You should bear in mind that you can’t claim tax-free childcare if you receive working tax credit, child tax credit, Universal Credit, or childcare vouchers.
Your tax credits will stop immediately if you successfully apply for tax-free childcare. You will also have to cancel your Universal Credit and childcare vouchers.
Use the government’s calculator tool to work out which option will work best for you.
While tax-free childcare remains unchanged, there were seven major changes announced for childcare amid yesterday's Budget.
During Martin's ITV Budget special he revealed how Brits on Universal Credit can get free cash with specific savings account.
He explained why thousands across the country will spend more on energy bills from next month, too.
But the expert revealed an easy trick that could save you hundreds.
Yesterday Martin offered his verdict on the Budget - he spoke to tax, energy bills, pensions, and free cash.
He was speaking after the government revealed the price of a packet of cigarettes would rise to £14.39.
Elsewhere, Jeremy Hunt gave millions of workers a pension boost by scrapping the lifetime pension allowance (LTA) to tempt people to work longer.
The Energy Price Guarantee (EPG) cap will also continue at £2,500 for another three months.
It was meant to rise to £3,000 a year for households in April but Hunt scrapped those plans today.
This will save the average household around £160, the government said.
Meanwhile, it was also announced drivers won't pay more for fuel as duty was frozen.
Help with childcare costs
There is a range of tax breaks and grants to help make childcare more affordable.
You can usually use them for care like registered childminders, nannies, playschemes, nurseries, and holiday clubs.
It’s worth checking the government’s handy to find out which scheme will save you the most money, as not all of them can be used at the same time.
Universal Credit childcare costs
You can claim back 85% of childcare costs up to £646 for one child or £1,108 for two or more up to August 31 following the child’s 16th birthday.
You will have to pay your childcare costs yourself up front and then claim the money back through Universal Credit -
15 or 30 hours free childcare
All three to four-year-old children in England are entitled to 15 hours of free childcare - amounting to 570 hours per year - from the term after their 3rd birthday.
The free allowance is usually taken as 15 hours per week for 38 weeks of the year, but it is possible to take it at a time that suits you.
The free early education and childcare must be with an approved childcare provider and stops when your child starts school.
Working parents may be eligible to get up to 30 hours of free childcare if they are working at least 16 hours a week on average and earning the National Minimum Wage or more.
Check out what you could get and apply .
Free childcare for 2-year-olds
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Parents living in England and claiming certain benefits can access some free childcare for their two-year-olds, including:
- Income Support
- income-based Jobseeker’s Allowance (JSA)
- income-related Employment and Support Allowance (ESA)
- Universal Credit, and your household income is £15,400 a year or less after tax, not including benefit payments
- tax credits, and your household income is £16,190 a year or less before tax
- the guaranteed element of Pension Credit
- the Working Tax Credit 4-week run on (the payment you get when you stop qualifying for Working Tax Credit)
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