While the childcare voucher scheme closed to new applicants on 4 October 2018. Parents who joined the scheme before that date can remain in the older scheme as long as their employer continues to offer it, or they have the option to move to the tax-free childcare scheme.

The following example illustrates the pros and cons from a tax and financial perspective.

Sally and Mike, both basic rate taxpayers, have one child and joined their employers’ childcare voucher schemes in May 2017. They pay £10,000 per annum for nursery fees.