THOUSANDS of parents with young children are missing out on lucrative childcare subsidies that could save them as much as £540 a month.

The government runs a nation-wide programme that gives 12.5 hours of free childcare to three-and four-year-old children for 38 weeks of the year, but most families are not aware of the scheme.

It could be worth as much as £135 a week, assuming you send your child to nursery for three days a week at £260.

Last year about one in four eligible families did not receive their full 12.5 hours a week free, according to the National Centre for Social Research.

Emma Knight, chief executive of the Daycare Trust, said: “Parents should not be asked to pay for something they’re entitled to for free. But large numbers of them call us saying they’ve been asked to pay for additional hours or hidden extras – and with childcare costs rising at above-inflation rates every year, this can add up.”

The average cost of a full-time nursery place for a child under two in England is £159 per week, or £202 in London and the southeast. A child minder costs an average of £144 per week. However, private childcare providers can charge up to £700 a week.

Families qualify for free hours whether they use local-authority or private childcare as long as the child is receiving education along government guidlines.

Parents could reduce the cost of their childcare even further using vouchers available from their employer.

Each parent can buy up to £55 a week – £220 a month – in vouchers out of gross income to pay for care for children up to the age of 16. This means the first £55 is free of tax and national insurance, saving a higher-rate taxpayer about £1,195 a year.

Children must attend a “registered” child minder, though, and parents report that these can be hard to find.

As many as 95% of parents whose firms offer these schemes are failing to subscribe.

Gary Hull of the accountant Price Waterhouse Coopers said: “Many people don’t use the voucher scheme because you can’t pay cash – this rules out some child minders. “However, the government has introduced a scheme to streamline the registration system with the aim of encouraging more providers to offer vouchers.”

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