Money Matters: Free childcare scheme is expanding - what you need to know

Childcare bills can be one of the biggest outgoings for households with young children, but are a necessary expense for many working parents.

The high cost of childcare means that many people are faced with having to choose between a family and their job, and end up giving up work because it doesn’t make financial sense.

To try and prevent this, the government announced last year that the free childcare provision currently offered to three and four-year-olds in England would be extended to younger children.

Applications for the first phase of this rollout – for children who are two years old or will have turned two before March 31 – have now opened.

If you meet the eligibility criteria, and you use a registered childcare provider who is part of the scheme, your two-year-old will get 15 hours a week (three hours a day) of free childcare from April onwards.

Younger children, aged nine months and over, will be eligible from September. Going forwards, all children will be able to access the free hours the term after they turn nine months old.

Then in September 2025, the number of hours for all eligible children will be upped from 15 to 30.

To access the free hours you will need to set up a childcare account through the government website and apply for a code to give to your childcare provider.

If you already have an account for Tax Free Childcare, you don’t need to set up a new one. You’ll be given a code the next time you re-confirm your details, which is required every three months.

The free hours apply for 38 weeks of the year, during term-time only – though some providers will let you spread the funding out over the whole year by claiming fewer hours per week.

To be eligible for the free hours, you (and your partner if you have one) must be earning more than the equivalent of 16 hours per week at minimum wage, but under £100,000 a year.

If you or your partner are on maternity, paternity, shared parental or adoption leave, or are unable to work due to a disability, you could still be eligible.

If you’re not a British or Irish citizen, your immigration status is also a factor – you’ll need to have settled or pre-settled status, or permission to access public funds.

It’s important to consider that not all childcare providers can offer the free hours, so check with yours as soon as possible.

If you’re planning to send your child to nursery or a childminder but haven’t chosen a provider yet, remember to ask about the free hours when you enquire, even if your child will be younger than the eligible age when they start.

You should also ask about any potential extra charges. Food and other consumables, such as nappies and sun cream, can be billed for, as well as any additional hours you book.

There are a number of other schemes that help with the cost of childcare, depending on your circumstances.

These include Universal Credit and Tax Free Childcare. While they can’t be claimed at the same time, both can be claimed alongside the 15 or 30 free hours, so it’s always worth checking your eligibility.