Working families are being encouraged to check whether they could reduce childcare costs through Tax-Free Childcare as Playday approaches on 5 August.
HM Revenue and Customs said its latest statistics show families using the scheme saved an average of almost £100 a month. The scheme can be used to help pay for holiday clubs, after-school clubs, nurseries and childminders.
Tax-Free Childcare can provide up to £2,000 per year per child, or £4,000 for a disabled child. Families can visit GOV.UK to check eligibility and sign up for an account.
Once signed up, families receive a £2 government top-up for every £8 they deposit into their account. Accounts can be opened for children aged up to 11, or up to 16 for a disabled child.
HMRC said almost 75,000 providers are now signed up to receive Tax-Free Childcare payments. The scheme can be used for approved childcare including nurseries, childminders, holiday clubs, breakfast clubs and after-school clubs.
While most families using the scheme have younger children, recent statistics show the number of families using it to pay for childcare for children aged eight and above increased by more than 20% compared with the previous year.
Families can receive up to £500 in top-up money every three months, or £1,000 for a disabled child. Eligibility rules include income conditions, age limits for children and restrictions for households receiving Universal Credit or childcare vouchers.