Martin Lewis has warned that thousands of families across the UK are missing out on a £2000 benefit due to the Government’s ‘misleading’ spin. The Money Saving Expert explained that 1.3 million families are eligible for a ‘Tax-free’ Childcare scheme that can covers childcare costs – including nurseries, childminders, and even some holiday camps.

According to gov. UK, under the scheme, one can earn benefits up to £500 every 3 months (up to £2,000 a year) for each of their children to help with the costs of childcare. However, Mr Lewis claimed that the scheme’s name is ” appallingly misleading,” which is why not many are able to take advantage of it.

He wrote in his blog: “Calling the scheme Tax-Free Childcare was a political spin to ensure the government gets credit for the scheme.

“Unfortunately the name is appallingly misleading, and probably partly responsible for the scheme having a much lower take up than it should. It’s not about tax in anyway, and isn’t linked to the tax rate you pay.”

“A better name would be ‘Working Family Childcare Top-up’, because it’s effectively a discounted childcare savings scheme where you save and then pay for childcare with a 25 percent top-up.”

The Government-backed scheme is designed so that for every 80p you put into your Tax-Free Childcare account, the state will add 20p.

He said: “1.3million families are eligible. There are 825,000 of the 1.3 million that are not claiming and this is worth upto £2,000 a year of money for free. 

“If you are paying for childcare, you go to Gov.uk and open a tax-free childcare account. For every 80p you put in there, the state adds 20p. So, you put £80 in, and you get £20 added. You put £800 in, and you get £200 added.

“Upto a maximum of £500 per quarter, so, £2000 per year of free money to pay towards childcare. That is a massive amount of cash for anyone shelling out, and that includes, if you are only doing it for the summer.

“If you are only paying for childcare for summer, as long as the place accepts tax-free childcare, which most do, then you can use this top-up. It’s effectively subsiding the childcare that you pay, which is why I am campaigning for it to be called ‘The Working Family Childcare Top Up’.”