Tories pledge to fix £100,000 childcare ‘cliff edge’ that forces parents to work less
Kemi Badenoch is expected to pledge that a Conservative government would remove the £100,000 income threshold that can cut off parents’ access to free childcare. The party says the current rules can make taking a pay rise or promotion financially unattractive, and that changing them would support working families and encourage economic growth.
Under the existing system, families can lose up to 30 hours of free childcare a week if either parent earns more than £100,000; the threshold applies to an individual, not household income. The Conservatives cite estimates that a parent crossing it may need to earn £124,000 by 2030 to break even, while a London parent with two children in nursery may need nearly £150,000. The party says its proposal would also remove the threshold for Tax-Free Childcare, cost more than £700 million, and be funded by reversing growth in some public bodies’ workforces since 2016.
- Conservatives pledge to scrap the £100,000 childcare threshold.
- Families can lose up to 30 free hours a week.
- The plan is estimated to cost more than £700 million.
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The government provides financial support for childcare to help working parents with costs. However, if you earn more than £100,000 a year, you lose access to this support entirely and must pay the full cost of childcare instead.
This creates a dilemma for parents earning above this threshold: a pay rise or promotion could be cancelled out by the loss of childcare support. For many families, the extra income from a higher-paid job would not cover the additional childcare costs they would face.
The threshold applies to individuals rather than household income, so it makes no difference whether one or both parents earn above £100,000 – either way, families lose the support. In expensive areas such as London, where childcare costs are particularly high, losing government support can create significant extra costs for professional families.
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The case for
The Conservatives argue that the £100,000 threshold creates a perverse incentive that penalises parents for earning more, potentially forcing them to decline promotions or reduce hours despite needing the income. They contend this suppresses productivity and economic growth, whilst being fundamentally unfair to families who must suddenly afford full childcare costs. By removing the threshold, they would eliminate this work disincentive and support the families most likely to drive economic growth.
The case against
Opponents contend that removing the threshold is expensive—over £700 million—and represents poor fiscal prioritisation, particularly given the proposed funding from public sector workforce cuts could harm vital services. They argue childcare support should target those who most need it, as higher-earning families have greater capacity to afford childcare themselves. A more graduated taper rather than outright removal could address the cliff edge without subsidising childcare for affluent families, leaving resources for more pressing needs.