A record number of families in Gwynedd were using a government scheme to help childcare costs last year, new figures show.

The Tax-Free Childcare scheme tops up cash families pay into a pot for services such as childminders, nurseries and nannies.

Across the UK, more parents than ever used it in the 2022-23 financial year.

HMRC figures show around 840 Gwynedd families used the scheme in the year to March 2023 – up from 575 the year before. This was the highest number since records began in 2017-18, when it was 30 – a 28-fold increase.

Families get £2 for every £8 they put into an account set up for childcare spending – up to £2,000 per child per year, or £4,000 for a child with a disability.

It is available for children aged 11 and under, or 16 and under if they have a disability.

Almost 650,000 families benefitted from the scheme across the UK – 27% more than in 2021-22 and a substantial rise from just 57,000 six years ago.

Neil Leitch, CEO of the Early Years Alliance, said countless families are still unaware they are eligible to receive support through it, or that it exists at all.

He said: “What’s more, it remains an entirely regressive policy, with parents with more disposable income receiving more financial support than those with less.”

He warned childcare providers are being forced to raise fees due to “sustained underfunding”, and the sector is facing “even greater pressure” with early entitlements soon to be expanded.

Not all children qualify for tax-free childcare. Parents must be in work and earning at least the equivalent of the national minimum wage or living wage for 16 hours per week. Those claiming Universal Credit, tax credits or certain other benefits, or when one parent earns more than £100,000 would be ineligible.

Purnima Tanuku OBE is chief executive of the National Day Nurseries Association, which is calling for all childcare funding to be put into a single online account, to make it easier for parents to access.

“This money should be re-invested in supporting childcare providers to deliver on the Chancellor’s childcare expansion promises,” she said.

A Government spokesperson said: “Last year we announced the single biggest childcare investment this country has ever seen, saving parents up to £6,500 on average and helping tens of thousands back to work.

“Take-up of Tax-Free Childcare continues to grow and roughly 60,000 more families used it in November 2023 compared to the year before.”