22 August 2019

"Something is going wrong somewhere" - Becky O'Connor, Royal London, comments on latest tax-free childcare statistics

5 min read

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Becky O'Connor

Personal Finance Specialist


The Government released quarterly tax-free childcare statistics this morning:

·Use of tax-free childcare fell from a peak of 145,300 families in May to 141,300 in June 2019, while total top-ups paid out fell from £17.3mn to £15.1mn

·Average top-up was £107 per family in June 2019, down from £113 per family last quarter

·Uptake remains at less than one tenth of the 1.5 million families the Government said would be eligible for the scheme*.

Becky O’Connor, personal finance specialist at Royal London, said:

“The monthly drop in use of a scheme already struggling to get off the ground is not a good sign. Something is going wrong somewhere with tax-free childcare. We are more than a year after full roll out and the number of working families using the scheme still falls far short of the number of families the Government anticipated would claim.

“Many parents are still unaware the scheme exists as it hasn’t been promoted directly to them by childcare providers, and many nurseries and childminders have still not signed up to it.

“The new scheme remains the poorer cousin of the childcare voucher system it has replaced for the majority of families.

“Generally, tax-free childcare is a good deal for those families with high childcare costs, such as working parents of one and two-year olds, who don’t receive any other kind of official support. Many parents who still receive the old childcare vouchers can continue to do so and will be better off on them, particularly for older, school age children.”


About Royal London:

Royal London is the largest mutual life insurance, pensions and investment company in the UK, with assets under management of £139 billion, 8.6 million policies in force and 4,348 employees. Figures quoted are as at 30 June 2020.

For further information please contact:

Lucy Field, Press Officer