The scheme offers savings of up to £2,000 a year on childcare costs.

To qualify you must have all adults earning the equivalent of at least the national minimum or living wage for 16 hours per week.

The payments are not available for those earning over £100,000 a year or claiming tax credits or universal credits in any form or other disqualifying benefits such as job seeker’s allowance.

It is available for children aged 11 or under, or 16 if the child has a disability.

The scheme covers nurseries, childminders, breakfast or after school clubs, holiday care and out of school activities.

For every £8 paid into an online account, you will automatically receive an additional £2 from the government. You can receive up to £500 every 3 months (£2,000 a year), or £1,000 (£4,000 a year) if their child is disabled.

Each eligible child requires their own tax-free childcare account. If you have more than one eligible child, you will need to register an account for each child. The 20% government top-up is then applied to deposits made for each child, not household.

Account holders must confirm their details are up to date every three months to continue receiving the government top-up.