Childcare help in 2026: Tax-Free Childcare, 30 free hours and Universal Credit
How the three main schemes work, who qualifies, and which ones can be combined so you do not leave money unclaimed
Childcare is one of the biggest bills a working family faces, and the government help is split across three schemes with different rules. This guide explains Tax-Free Childcare, the funded hours in England and the childcare element of Universal Credit, and shows which combinations are allowed. Getting the combination right can be worth thousands of pounds a year.
Tax-Free Childcare
You open an online childcare account on gov.uk. For every £8 you pay in, the government adds £2, up to £500 a quarter, which is £2,000 a year per child, or £4,000 for a disabled child. You then pay your registered nursery, childminder, after-school club or holiday scheme from the account.
It runs until the child is 11, or 16 if disabled. You reconfirm your eligibility every three months.
Eligibility:
- Each parent (or the single parent) must earn at least the equivalent of 16 hours a week at the National Living Wage. At £12.71 an hour that is about £203 a week, or roughly £2,640 over three months.
- Neither parent can have adjusted net income over £100,000.
- Self-employed parents qualify, with a start-up exemption from the minimum earnings rule for the first year.
- You cannot receive Tax-Free Childcare at the same time as Universal Credit or tax credits.
Funded hours in England
| Scheme | Who | Hours |
|---|---|---|
| Universal entitlement | All 3 and 4 year olds | 15 hours a week, 38 weeks a year |
| Working parent entitlement | Children from 9 months to 4 years | 30 hours a week, 38 weeks a year |
The 30-hour offer for working parents reached children from 9 months in September 2025 and is now fully rolled out. The earnings and income tests are the same as for Tax-Free Childcare. You apply through the same gov.uk childcare service, receive a code and give it to your provider. Codes must be renewed every three months, and you need a valid code before the start of the term in which you want to use the hours.
Some providers charge for extras such as meals, nappies and trips, and some restrict which sessions the funded hours can cover. Ask for a written breakdown before you sign up. Scotland, Wales and Northern Ireland run their own funded schemes with different ages and hours.
Universal Credit childcare element
If you receive Universal Credit and you (and your partner) are working, you can claim back 85% of your registered childcare costs, up to a monthly cap that depends on the number of children. The cap is uprated each April; check the current figures on gov.uk. Costs are paid after you report them, so you need to pay the provider first, although help with the first month's upfront cost is available through the Flexible Support Fund or an advance.
Which schemes can be combined
| Combination | Allowed? |
|---|---|
| Funded hours plus Tax-Free Childcare | Yes |
| Funded hours plus Universal Credit childcare | Yes |
| Tax-Free Childcare plus Universal Credit | No |
Choosing between Tax-Free Childcare and Universal Credit is the decision that matters for lower and middle earners. Universal Credit covers 85% of costs, so for high childcare bills it is usually worth more than the 20% top-up from Tax-Free Childcare. But claiming Universal Credit depends on your overall income and savings, and opening a Tax-Free Childcare account ends any Universal Credit claim. Run both through a benefits calculator before choosing.
What to do next
- Check your eligibility for the working parent hours and apply the term before you need them.
- If you do not get Universal Credit, open a Tax-Free Childcare account and set up a standing order to it.
- If you might qualify for Universal Credit, use a free benefits calculator to compare it with Tax-Free Childcare before applying for either.
- Set a reminder for the three-monthly reconfirmation. Missing it can stop both the hours and the top-up.
- Details for all schemes are at childcarechoices.gov.uk.