From 2017, a new Tax-Free Childcare scheme will help parents meet those costs. It was announced by the government in the Budget 2013 and will be available for almost 2 million families.

We give you the lowdown on what support will be available, plus how you can get it.

Are you eligible for the Childcare scheme?

Did you know?

Unlike the current voucher scheme, it will not rely on your employer choosing to enrol - instead it will be available to all qualifying families.

Once the government's new Childcare Scheme is fully up and running it will provide tax free childcare support to your family if:

  • both parents (or a lone parent) are in work

  • not receiving support through the Childcare Element of Working Tax Credits/Universal Credit

  • neither parent has an income over 150,000

  • whether an employee, self-employed or on a minimum wage

  • couples where one parent is in receipt of Employment and Support Allowance, or is a full time carer in receipt of Carer's Allowance, will be eligible provided the other party is in work

  • lone parents in receipt of ESA or Carer's Allowance will be eligible for the scheme

What will you get from the scheme?

The scheme is set to be made available in 2017, and it will be rolled out to cover children under 12 within its first year.

Under the scheme you will pay 80% of childcare costs per eligible child, with the remaining 20% paid by the government. The maximum amount the government will pay is 2,000, and you would have to pay in 8,000 yourself for that amount. You will be responsible for any costs over 10,000.

The scheme will cover children with disabilities until they are 17. Childcare support should also be available, from April 2016, for working families who receive Universal Credit.

Read our guide for more ways you can get help with the cost of childcare.

How do you claim the support?

The government's contribution to childcare support will be paid directly into an online account you can open through the Gov.uk website.

You will also have to pay your contribution into this account, with the flexibility to pay in whenever you like. For every 80p you contribute, the government will add 20p.

The accounts will be run by HM Revenue & Customs alongside National Savings & Investments. You can use the money paid into the account by you and the government to pay the registered UK childcare provider of your choice, as the new system will not be administered by employers.

You will be allowed to continue to claim under the Tax Free Childcare scheme while you are on paid leave - including sick leave and maternity or paternity leave. However, you can only claim for children eligible before you began that leave. You will not be able to claim during any unpaid leave.

What if you want to withdraw the money?

You will be able to withdraw funds you have paid into the account, if needed. However, the government would then reclaim its corresponding contribution.

For example, if you withdrew 800, the government would take back 200 of the money it had added.

What will its effect be?

As the new Childcare Scheme is phased in from 2017, the existing Employer Supported Childcare voucher system will simultaneously be stopped for anyone not already registered for it.

Parents that already claim ESC vouchers will need to choose between continuing to do so (worth up to 933 per parent) and the new childcare scheme (worth up to 2,000 per child); however the old system will close to new claimants.

What other childcare changes are due?

Alongside this support the government plans to reduce the cost of childcare across the UK by increasing ratio of children to carers. Current ratios (adult:children) in England:

  • 1:3 for children aged 1 and under

  • 1:4 for two-year-olds

  • 1:8 for children aged 3 and over (or 1:13 if teacher-led)

The proposed changes would push ratios up to 1:4, 1:6 and 1:8 (1:13 teacher-led), respectively.