Parents will save up to £500 a year as government action on how baby formula is displayed will help them choose the lower price infant formula that is right for them.

The changes will help those who cannot - or choose not - to breastfeed their babies to provide them with the best possible start in life, alleviate child poverty and put hundreds of pounds back in parents' pockets.

The move follows a detailed market study from the Competition and Markets Authority (CMA), which found families opted for more expensive products and could be influenced by messaging on packaging that may be hard to verify.

Supermarkets and retailers will get updated guidance, confirming the products can be bought using gift cards, vouchers, loyalty points, and coupons – giving parents extra savings.

Prime Minister Keir Starmer said: ‘For too long, parents have been pushed into spending more on infant formula than needed - told they're paying for better quality and left hundreds of pounds out of pocket.

‘I can announce today that we are changing that. We will take action to give parents and carers the confidence to access infant formula at more affordable prices. With clearer guidance for retailers and helping new parents use loyalty points and vouchers, together that will save them up to £500 before their child's first birthday.

‘That builds on our action to lift over half a million children out of poverty, extending free breakfast clubs and our Child Poverty Strategy will be published later this week.'

Health and social care secretary, Wes Streeting, said: ‘New parents want the best for their baby, and it's wrong that vague on-pack messages are leaving families out of pocket for an essential product.

‘It's not right that manufacturers have been able to package up these products in a way that plays on the instincts of new mums and dads who are just trying to do what's right for their child.

‘These new measures mean parents will have confidence in the formula they are buying, no matter the price, and can now make the most of supermarket loyalty schemes too.'

The government is also considering further support on enforcement and working closely across the devolved governments and with local authorities, to update guidance on how these products are marketed.

The UK, Scottish and Welsh governments, Food Standards Scotland, and the Department of Health and Food Standards Agency in Northern Ireland are committed to working closely, in consultation with stakeholders, on this package and will keep this package of measures under review and consider whether further action is required in the future.