Joint letter on up-rating the tax-free childcare cap
Published: 26 Nov 2025
Today (26 November, 2025), Working Families joins with Pregnant Then Screwed and Melted Parents NI to call on the UK Government to up-rate tax-free childcare in line with inflation.
Currently, tax free childcare allows parents to claim back up to £2,000 in childcare costs after its introduction in 2017. Since then, costs have increased for parents with the rising cost of living. With childcare costs now 34% higher than in 2017, we are arguing that the support offered to parents through the system is fast becoming insufficient. Updating the Tax-Free Childcare cap to reflect inflation would be a simple, fair and effective way to ease the financial burden on families.
The renewed call, being led by SDLP Leader Claire Hanna MP, alongside Pregnant Then Screwed, was sent to the Chancellor ahead of her second Autumn budget, calling for an increase the tax free allowance in line with inflation. If the UK Government chooses to do so, this would mean money back in the pockets of parents who need it most.
The letter was signed by 27 MPs, and supported across parties including Labour, the SNP, Plaid Cymru, the SDLP, the Green Party, Alliance and the Liberal Democrats.
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Tax-Free Childcare
A scheme to help with the costs of childcare for parents who are not eligible for tax credits or universal credit.