Childcare Vouchers — What You Need to Know in 2026

The childcare vouchers scheme is closed

If you’re searching for childcare vouchers, the most important thing to know is this: the scheme closed to new applicants on 4 October 2018. You cannot sign up for childcare vouchers in 2026.

The government replaced childcare vouchers with Tax-Free Childcare, which is open to all working parents and offers up to £2,000 per child per year in government top-ups. If you’re looking for help with childcare costs today, Tax-Free Childcare is the scheme you need.

That said, if you joined a voucher scheme before the October 2018 deadline, you may still be receiving vouchers. This guide covers what you need to know about your existing vouchers, how they compare to Tax-Free Childcare, and whether it makes sense to switch.

What were childcare vouchers?

Childcare vouchers were an employer-provided benefit that allowed working parents to pay for childcare from their pre-tax salary. Your employer would deduct a portion of your gross pay and convert it into vouchers, reducing the amount of income tax and National Insurance you paid.

The scheme launched in 2005 and was hugely popular. At its peak, millions of working parents used employer childcare vouchers to reduce their childcare costs. The vouchers could be used with any registered childcare provider — nurseries, childminders, after-school clubs, and holiday schemes.

How the tax savings worked

Because vouchers were taken from your salary before tax, the saving depended on your tax rate:

Tax band	Annual voucher limit	Tax saved	NI saved	Total annual saving
Basic rate (20%)	£2,916	£583	£350	£933
Higher rate (40%)	£1,484	£594	£30	£624
Additional rate (45%)	£1,320	£594	-£4	£590

Basic-rate taxpayers benefited most, saving up to £933 per year. If both parents used vouchers, the household saving could reach £1,866.

Can I still use childcare vouchers?

Yes — but only if all of the following apply:

• You joined your employer’s voucher scheme before 4 October 2018
• You have remained with the same employer continuously since joining
• Your employer still runs a voucher scheme

If you meet these conditions, you can continue receiving childcare vouchers for as long as you stay with that employer and have a child in eligible childcare (up to age 15, or 16 for disabled children).

When do vouchers stop?

Your vouchers will stop permanently if:

• You leave your employer — even if your new employer once offered vouchers, you cannot rejoin
• Your employer closes the scheme — some employers have wound down their schemes since 2018
• You sign up for Tax-Free Childcare — opening a Tax-Free Childcare account and receiving a top-up ends your voucher entitlement immediately
• Your child ages out — vouchers cover childcare costs until your child turns 15 (16 if disabled)

Important: Leaving childcare vouchers is a one-way door. Once you stop, you cannot rejoin. Make sure you’ve compared both schemes carefully before making a decision.

Childcare vouchers vs Tax-Free Childcare

This is the key question for parents still on vouchers. Here’s how the two schemes compare:

Feature	Childcare vouchers	Tax-Free Childcare
Open to new applicants?	No (closed Oct 2018)	Yes
How it works	Salary sacrifice (pre-tax)	Government tops up deposits by 20%
Maximum saving (basic rate)	£933/year per parent	£2,000/year per child
Maximum saving (higher rate)	£624/year per parent	£2,000/year per child
Multiple children	Same saving per parent regardless	£2,000 per child (multiplies)
Both parents claim?	Yes, each parent gets own allowance	Yes, both contribute to same account
Self-employed eligible?	No	Yes
Income cap	None	£100,000 per parent
Child age limit	Up to 15 (16 disabled)	Up to 11 (16 disabled)
Reconfirmation required?	No	Every 3 months

The two-child tipping point

For families with one child, the picture is mixed. A basic-rate taxpayer using vouchers saves £933 per year (or £1,866 if both parents claim). Tax-Free Childcare offers up to £2,000 per child — so a single-parent household might save less with vouchers, while a two-parent household could save slightly less with Tax-Free Childcare, depending on actual childcare spend.

For families with two or more children, Tax-Free Childcare almost always wins. The saving multiplies per child (£2,000 each), while voucher savings stay the same regardless of how many children you have.

Use the Tax-Free Childcare Calculator to compare your exact savings under each scheme.

Should I switch to Tax-Free Childcare?

Switching probably makes sense if:

• You have two or more children in childcare — Tax-Free Childcare gives you up to £2,000 per child, while vouchers are capped per parent regardless of how many children you have
• You’re a higher-rate taxpayer — your voucher saving is only £624/year, well below the £2,000 Tax-Free Childcare cap
• You’re self-employed or your partner is — vouchers are only available through employers, while Tax-Free Childcare covers self-employed parents
• You want to combine with free hours — Tax-Free Childcare works through the same government childcare account used for free childcare hours, making it easy to manage everything in one place
• You spend more than £4,665 per year on childcare per child — at this level, the 20% Tax-Free Childcare top-up exceeds the basic-rate voucher saving

Staying on vouchers might make sense if:

• You’re a basic-rate taxpayer with one child and low childcare costs — your £933 saving could beat Tax-Free Childcare if you spend under £4,665/year
• Both parents are basic-rate taxpayers using vouchers — combined saving of £1,866 is close to the £2,000 Tax-Free Childcare cap for one child
• You don’t want the hassle of reconfirming every 3 months — vouchers run automatically through payroll with no quarterly reconfirmation

When in doubt, run the numbers through the Tax-Free Childcare Calculator or the government’s own childcare calculator.

How to switch from vouchers to Tax-Free Childcare

If you’ve decided to switch, follow these steps:

1. Run the numbers first — use the Tax-Free Childcare Calculator to confirm you’ll save more. Remember, you cannot go back to vouchers once you leave.

2. Use up existing voucher balance — spend any vouchers you’ve already received. Most voucher providers give you several months to use accrued vouchers even after you leave the scheme.

3. Notify your employer — tell your HR department you want to leave the childcare voucher scheme. They’ll adjust your salary back to normal pay.

4. Apply for Tax-Free Childcare — go to gov.uk/tax-free-childcare and set up your government childcare account. You’ll need your National Insurance number, employment details, and a valid passport or driving licence.

5. Add your childcare provider — your nursery or childminder must be registered to receive Tax-Free Childcare payments. Most already are.

6. Start depositing — pay money into your childcare account and the government adds 20% automatically. Then pay your provider directly from the account.

The switch typically takes a few days once your Tax-Free Childcare application is approved. Plan for a brief overlap period where you’re transitioning between payment methods.

Other ways to save on childcare

Whether you’re on vouchers, Tax-Free Childcare, or neither, there are several ways to reduce your childcare costs:

• Free childcare hours — all 3-4 year olds get 15 hours free. Working parents can get up to 30 hours from 9 months old.
• Tax-Free Childcare — the current government scheme offering 20% top-ups on childcare payments, worth up to £2,000 per child per year.
• Government childcare account — the single place to manage Tax-Free Childcare and free hours entitlements.
• Universal Credit childcare element — if you’re on Universal Credit, you can claim up to 85% of childcare costs (up to £1,031.88/month for one child, £1,768.94 for two or more).

Use our Tax-Free Childcare Calculator to work out your savings, and find nurseries near you that accept government-funded childcare.