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Only 22% of expected families take up tax-free childcare

By Rachel Lawlertax-free childcare
 
Government figures show that far fewer families than expected are using the tax-free childcare offer.
 
Just 91,000 parents accessed the offer in December 2018, compared to an expected 415,000 families that were originally expected to be using the offer by December 2017.
 
Tax-free childcare
Tax-free childcare gives working parents up to £2,000 towards their childcare costs each year. Eligible parents can pay funds into a childcare account, which is then topped up by the government – each £8 is topped up by £2. This can then be used to pay childcare providers directly.
 
Take-up of the offer may have been affected by a series of technical problems at the launch of the Childcare Service website, which parents must use in order to access the offer. The roll-out of tax-free childcare was delayed as a consequence.
 
Low take-up
The Office for Budget Responsibility predicted that that treasury would spend £880 million on tax-free childcare in 2017-18 but this was revised to £37 million after low take-up.
 
Technical issues
Neil Leitch, chief executive of the Alliance, said: “Given that so many parents across the country are continuing to struggle with the cost of childcare, the fact that this flagship scheme has had so little take-up demonstrates just how poorly this policy has been rolled-out.
 
“Ongoing technical issues have meant that many parents still struggle to complete the simplest of tasks, even just signing up for the scheme, or reconfirming their eligibility. And of course, the regressive nature of this policy - as those who can afford to put the most into their childcare accounts get the greatest support from government - means that for many families on lower-incomes, it simply isn't worth the hassle.”
 
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