Martin Lewis warns 800,000 parents are missing out on 'tax free £2,000'

Martin Lewis has issued an urgent warning to 800,000 parents missing out on £2,000 to help with summer childcare costs. The BBC and ITV star is urging parents to claim tax-free childcare this summer as the schools wrap up for a holiday.

Speaking on ITV's This Morning, where he dialled in via video link opposite Cat Deeley and Ben Shephard, Martin said: "There's a scheme called tax-free childcare, which has nothing to do with tax and isn't tax-free. It's terribly named, awfully confusing, and puts people off.

"But there are 1.3million people eligible for it, and only 500,000 claim it. Over 800,000 that are eligible don't claim, and it can be really substantial money. I would actually rename it, and I'm campaigning to do so, something more like Help to Pay for Childcare, which is a better description.

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"Now, the reason it's important right now is, while you can use it for nursery care and childminders throughout the year, if you're going to send your kids over summer to, say, could even be a football camp or a drama camp or a summer camp.

"As long as it is Ofsted or Early Years Register or Childcare Register regulated, then you can use the tax-free childcare scheme." You can get up to £500 every 3 months (up to £2,000 a year) for each of your children to help with the costs of childcare. This goes up to £1,000 every 3 months if a child is disabled (up to £4,000 a year).

If you get Tax-Free Childcare, you’ll set up an online childcare account for your child. For every £8 you pay into this account, the government will pay in £2 to use to pay your provider. You can get Tax-Free Childcare at the same time as 15 or 30 hours free childcare if you’re eligible for both.