MARTIN Lewis has issued an urgent warning for all parents as hundreds of thousands miss out on £2,000 free cash every year.

Many families are still missing out on vital support through the government's tax-free childcare scheme.

The benefit was claimed for a total of 836,000 children in the last financial year, according to the latest stats by HMRC.

But more than 650,000 parents are still believed to be missing out.

But on average, parents are only claiming £638 per child, far short of the £2,000 they are entitled to.

During an appearance on ITV's This Morning, Martin Lewis helped a viewer who wanted to know if he and his partner could claim any support for their young grandson.

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The couple said they are the child's legal guardians, meaning they have legal authority to care for the child.

The consumer expert urged him to check to see if he could be entitled to tax-free childcare.

Martin said: "If you are a single parent and you're working, or you're in a couple and you're both working, and earn less than £100,000, then you can effectively get the state to put some money towards your childcare.

"So for every 80p you save in tax-free childcare, the state will add 20p on top.

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"And there are hundreds of thousands of families missing out on tax-free childcare which could help to pay your nursery fees."

You can get up to £2,000 per year for each of your children to help with the cost of childcare.

If your child is disabled, you can get up to £4,000 a year.

You can apply on the government's website by signing up for a childcare account.

What is tax-free childcare?

Tax-free childcare is a government scheme where parents or guardians can get £2 free for every £8 put into an account.

Parents can get up to a maximum of £2,000 a year per child or £4,000 if their child is disabled.

The child has to be 11 or younger, or 16 if they are disabled.

The money has to be used to pay for childcare, including nursery, childminders, break or after school clubs.

It can be used to pay for holiday care or an out of school activity too.

As an example, if your childcare costs are £750 a month, you could pay £600 into your childcare account and the government would pay £150.

Not only are you covered each month, you'd be saving £1,800 a year per child.

It's worth doing the maths yourself to figure out how much you should be putting into your account each month.

Who is eligible and how can I claim?

Whether you are eligible or not for tax-free childcare depends on your personal circumstances, including your income.

But, you can still get help if you are working, including if you are self-employed.

You and your partner need to be earning the equivalent of 16 hours a week at the national minimum or living wage.

But, if one of you earns over £100,000 or more a year you won't qualify.

This does mean you can qualify for tax-free childcare if you earn £99,999 a year or less though.

Remember, you can claim tax-free childcare at the same as 30 hours of free childcare.

But you can't claim under the scheme if you are on tax credits, Universal Credit or receiving childcare vouchers.

You can apply for the scheme online via the government's website.

The application process should take around 20 minutes and you'll need your National Insurance and Unique Taxpayer Reference (UTR) number to hand (if you are self-employed).

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Meanwhile, the free-childcare scheme is to be extended again to parents of children aged nine months to two-years-old – find out what it means for you.

Plus, the government will start paying for childcare costs up front for those on Universal Credit.

You can also join our new Sun Money Facebook group to share stories and tips and engage with the consumer team and other group members.

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