Sadly if one or more individuals earn 100k plus (including bonuses/all income) there is no funding available for hours or tax free childcare. If you mean combined 100k plus that’s ok (so each earning up to 100k) as long as one isn’t 100k plus themselves. I say ‘sadly’ because I think it should be a combined income (though still both having to be in work)… for example if 2x parents were earning 90k each so £180k total they would qualify whereas if one earner is £110k and one is £30k so £140k total (so less overall) they don’t qualify for anything. Once a child is 3 they will qualify for some free hours. Depending by how much over the 100k you are, you can opt to pay more into a pension as this doesn’t count so you could lower your actual salary below £100k but you’d have to weigh up the money in the hand vs pension and saving with hours if it’s worth it. The insta accounts Nugget Savings and Pregnant than Screwed are helpful resources.
@Yana the hours (15/30) are per week but only school term weeks so 38 weeks per year. It depends on the nursery but most will just spread the saving across the full year. Also depending on the nursery there are top up fees to pay for the funded hours to cover other costs/consumables and can depend on your area too. A hourly rate in London is like £15 but the government funding might only cover £6 so you’d have to pay the difference. Whereas in some areas in the UK that gap will be smaller. It’s definitely not just ‘free hours’. At the moment 9+ months receive 15 hours and from 3 years it’s 30. From September next year the 30 hours will be from 9+ months too. But only if you qualify and still for 38 weeks and with nursery costs on top. You may also be able to use tax free childcare which tops up fees paid per quarter (up to £500). It is really hard to understand them because it’ll depend on the place you go and how they have implemented them.
Hello…this is our reality and I’m afraid it isn’t pretty. I’m so sorry if i’m repeating what the others have said here already! Until baby is 3 it’s currently nothing. Both the 20% tax free and (relevant to us now) the 30 hours cut off as soon as you go a penny over £100k. However, if you’re only just over the mark I would seriously consider sacrificing more into your pension as the £100k mark is after pension contributions! It can get a bit tricky and you might need to speak to an accountant to make sure you’re doing the right amount but it would save you so much money. We can’t do this due to an end of year variable bonus which is generally up to 15% so it doesn’t make sense cash flow wise 😵💫 At 3 it’s 15 hours the term after their birthday! For us this is 20 days away and I’m counting them down 😅 Our 4 day bill will go from £1615.68 to £1192.39 (I think…tbc exactly). If it was 30 it would go down to £769.38 😭 though.
@Lauren It’s pure BS that the threshold isn’t combined household isn’t it! It’s so true that the limit is currently 2p shy of £200k combined yet 1 parent over £100k and it’s nothing 🤯
Thanks all - still very confusing tho. So from Sept next year 9+ months baby will get 30hrs free? @Lauren Also, im just under 90k and my partner at 80k. So we would still qualify right? Any links you can share would be amazing. Do you also recommend i start asking nurseries if they’ll have availability for our baby next year for 15or30hr once the baby is 9months?
@Madeleine so BS it’s not combined!!! I understand £100k is a very good salary for the UK but also depending where you live (London) it’s only just enough at times. It’s crazy that 2 individuals could earn £60-70k each and qualify or literally £99k each and still be ok but just one at £100k plus and no. My husband is 90k but will be getting a decent bonus (obviously great) start of next year but that’ll put him over and I’m about to be on mat leave again so my earnings will drop but won’t be eligible for anything for our toddler and then we will have 2 and not eligible for anything when I go back to work even. So harsh! Totally get they want to encourage women back to employment but surely they could make it combined income and stipulate x hours or pay coming from each individual.
It is confusing! Yes from September 2025, 9+ months can qualify for up to 30 hours per week for 38 weeks of the year. But some nurseries may only offer less or have the fees on top etc. so just have to enquire/get quotes. A lot might not even know yet how they will implement from Sep 25 but hopefully after doing it for the 15 hours they will have some insight. Yes you will qualify for hours and tax free childcare on those salaries. So long as one of you isn’t expecting a bonus which would put you over. As above my husband is 90k but about to get a good bonus that’ll put him closer to £120 but I’m only £50 and about to be on mat leave so we get nothing for our toddler now. Crazy though how it’s the same earnings as you but because it’s one person over then nothing. Anyways you can only sign up to qualify the month before you are due back to work and that’s when you get codes etc. Definitely the resources mentioned about above are good - Nugget Savings and Pregnant than Screwed.
And yes depending where you are located, definitely start looking now as places do fill quickly and have waiting lists and they will probably be even more in demand with the extra hours coming in. A lot of places you need to have names down a year before wanting to start. Also would look at the gov website and this is quite a helpful summary - https://educationhub.blog.gov.uk/2024/04/08/free-childcare-how-we-tackling-the-cost-of-childcare/
@Madeleine the previous government were going to change this to household income from April 2026 but it was scrapped in the last budget so unlikely to see any change for a while 😭
Worth noting it’s the term after they turn 9 months, so a Feb baby turning 9 months in Nov doesn’t get funding till the January 26 term starts. My son turned 3 in Oct and doesn’t get increased funding till Jan.
@Lauren Ugh it’s so hard, does he know what his bonus could be capped at? I’d seriously consider putting more into pension to take him just under £100k as it’s still his money then but you’ll save so much! Complicated though 😭
@Lauren I got so excited when they said 30 hours for “all” only for it to be backtracked when the details came out (and that was before this government too) 😭 And then applying the NI increase to early years providers so they increased fees 🤯🤬 That being said I don’t know if that change would have even happened either. I know we’re privileged but the difference between £1615.68 and £769.38 per month for a family just over the threshold is madness. We live in London (outskirts).
@Madeleine Yes I have this problem as do alot of my colleagues (medics) with young children. We have all dropped one or two sessions so work 3 days a week and some salary sacrifice for the fleet cars or pension. This brings our salaries down below the threshold. Also remember it’s not earning bang on 100k as I actually earned circa £110k but as my adjusted net income was still below £100k it’s ok. This year it will be more so to qualify I just dropped my sessions and decline overtime. Husband is the same. It’s only temporary and can pick up the sessions again when baby out of nursery.
@Linda Ah we did actually contemplate an electric car scheme they introduced recently but I think because he’s also due a payrise at the end of this financial year which relates to bonus it’s almost impossible to calculate and we might end up still over the limit! They should just make it a household £200k and be done with it 😭 It’s crazy you have to do this to save money, do you enjoy having the extra time or do you resent it?
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Sorry but if one of you earns over £100k you can definitely afford to pay for childcare. That salary is more than enough
@Jessica Say you were a single parent not by choice (let’s say family tragedy), had 3 kids under 4 and worked full time with no family support. That bill at our nursery would be £72.5k per year. After tax £100k wouldn’t cover that. Nobody is saying £100k isn’t a great salary but it’s relative location wise, and the cut off takes no prisoners and it needs review (especially when the limit is actually just shy of £200k combined for a household).
@Jessica totally understand £100k is a good salary but it’s not enough to afford childcare in London and rent. That’s without food or any other costs. My childminder is £120/day and you would struggle to find anything below £100/day. Some are even a lot more than £120/day too. We are mid-range. My monthly childminder bill is around £2,300 per month!!! With 2 kids it’ll be around £4,500 per month and some nurseries for my 2+ old don’t even do all day so may need to add on wrap around care. My salary is £50k so decent but the gap between what I actually get paid and need to pay is c.£1,600/month. My husband is £90 plus bonus so will be around £120k so really good but with rent (we are in a small 2 bed flat at £2k/month) and cost of living and the shortfall, we actually can’t cover costs which is scary. Our combined income is £140 plus my husbands bonus which also gets taxed heavily. But if we both earned £90k so £180k total we’d qualify for help which is bonkers!
@Jessica It feels really unfair that combined we would be less than others who are able to access help. Even my husbands salary which is very good is £4,800 in the hand per month but with 2 in nursery at £4,500 he’d be left with £300!!! Imagine if something happened to me. He’d have to work but the care for 2 would cost the entire salary. What about rent etc. and that’s because he’d be just above the threshold. Even a family both earning £60k so £120 combined would be better off when you add in the savings for childcare. Childcare and cost of living in London is so expensive. And we’ve tried to keep our rent as low as possible and not moving because the cost jump would be too high so squished in a flat. We’ve looked at moving out of London but with jobs/commute can’t go too far and there isn’t a huge cost saving plus we’d then need to get a car probably and the cost of travel to get into the city is more. So totally get the comment of £100k is good but the system is still unfair.
@Madeleine I think with bonus it’ll take him to £120k so get extra smashed with tax too and no childcare benefit. Of course still grateful and we are lucky overall but it’s a small boost and will basically cover the shortfall in childcare when I’m back to work with 2 kids in care and maybe a tiny bit into savings. Its maybe too much though to be putting into pension plus we are Australian and not sure if we will retire here or can access. Maybe for 2024 when both are costing we should though because our fees will be c.£4,500 per month for 2 with no funding. It makes me feel sick. Very disappointing the government have changed plans but am sure regardless of which it might never of gone to combined. But it really should as it’s just so bloody unfair!
@Madeleine Yes I plan to use the time to actually spend with my child and family. I have worked very hard to be in this position, not to mention paying a load of tax (2k + a month) so I do not feel guilty one bit about reducing my salary under the threshold to benefit from childcare. The extra time off is a bonus. Actually many of my colleagues just do private practice/Consulting to LTD company in that free time and use their accountants to advise them how best to use the income from that which I will also do.
@Lauren I strongly urge you to see a tax consultant/accountant and arrange pension sacrifice. 120k is still well within the remit for this which will take you under the threshold and then you can access the childcare. Eligibility is not based on your gross income, its adjusted net income. After all it’s high earners like your husband that are paying for all these things through tax deductions.
@Lauren This is our dilemma…just a bit too far over the threshold to make salary sacrifice worth it. Ironically if we’d had our 💩 together when she first went to nursery we could have made it work but no longer! Mortgage just went up £800 this month too 🤯 £100k is no longer wealthy when you have kids under school age, at least not in London…
@Linda It does sound like a good compromise, you don’t get these years back do you! ♥️ 1000% worth it
Also...can someone tell me where we can check all of that? I'm a bit lost on the gov website. And are those hours per week, or per month?