The £100k childcare cliff edge - how is anyone meant to make this work?

I agree that it's bonkers. I think if we want people to accept paying high taxes, we have to offer as many universal benefits as possible. You don't become ineligible for NHS care or school places above a certain income, and I think a lot of high earned would feel more like they got a fair deal if what they got back from the state didn't decrease as their tax take increased.

Havent rtft but yanbu.
Childcare needs an overhaul.

What no one seems to want to acknowledge is if you the audacity to also have Private healthcare and dental for your family or any other other "taxable benefits" you dont need to earn anything like 160k to be stuffed on childcare....and even jamming 60k (which you need now) into a pension wont help you.

It's a total farce and I am sick of being told I should be delighted and how bad every other bugger has it ....when my basic living costs are now tipping over 8.5k per month net and almost 5k of that is childcare. We have reduced meat consumption and shop in aldi - i have never had lower disposable income in my adult life.

And I am not allowed to admit / supposed to say out loud that I am fucked off because everyone else has it worse so what's wrong with me?

what's wrong with me is I AM supposed to be living well (I earn in the top 5% and not much about my life is indicative of top 5% right now), its supposed to be easy for me, I should be able to stroll into a shop and pick up a £200 dress and be all "whatever"....

If it was at all viable/ possible for me to go part time I would be doing it without hesitation.

I agree that childcare needs to be better funded and reviewed. There should be a sliding scale but I have a feeling that the government still might set this at 100k for the top end.

Most people now days have to plan an age gap to avoid having two in nursery full time. It’s becoming very common to have a 4 year age gap or larger. I hardly know anyone any 2 year age gap and if they did they are very fortunate to have family help with childcare or money to fund it.

Those childcare costs are eye watering. I'm £40 per day (Scotland). I'm under the threshold and get 20% paid with tax free childcare. I had no idea it was so expensive in the SE. I would also consider paying extra into pensions. We do that as it keeps my OH just under the CB threshold as with 4 children CB really helps.

Her husband earns over the threshold, and she’s just spent years retraining into a new career that she’s passionate about, but is now entry level.

That in itself is a luxury most families with children cannot afford.
I've had people suggest "why not retrain?" - errr cos I can't afford not to earn money while I spend years doing that.

The issue seems to be people on around £100k whinging that other taxpayers, 95 odd percent of whom earn nothing like that, should subsidise their childcare costs. And that really, it would be in their best interests to do so. Totally ridiculous.

The tax free childcare came in when mine was small and actually child care vouchers were still possible. It didn’t save masses but a couple of hundred a month between the two of us (I think). It is only a short-term cost and painful at the time but it does eventually go.

Net debt is phenomenal at the minute - look at the data published this week. I appreciate the £100K taper is unfair and doesn’t encourage productivity and it’s tough for so many people but these policies are not easy to implement (this one took a good few years). Personally, and controversially, if any funding was available, I’d prefer it to benefit in having children school ready who may come from dysfunctional homes. I think that this will have the most economic benefit for the country in the long term.

You’ve not understood the issue of how the funding is removed, and the impact this has on incomes over £100k.

People don’t ’just suck it up for a few years’ when they’re paying 100% tax on a third of their income. They take action to avoid it - pensions (~28k in tax immediately lost for HMRC, plus having to fund the hours), or moving part time.

Our family income (not highest earner) is nowhere near 100k and I think the system is bonkers... it should be based on a family income and be tapered. Or, if that is to much trouble... just make it universal.

The problem is its a halfbaked Conservative idea poorly delivered by a Labour government who didn't fully believe I it. (Any Party can be substituted in).

They have improved the child benefit situation, by making it a gradual reduction from (I think) £60-80k. So you’re not worse off by earning more (I don’t think?)

Why they don’t do something similar for £100-120k or even £90-110k for the childcare hours I don’t know. Actually I do - it would be too difficult for nurseries to administer I expect.

It is absolutely crazy though. Problem is £100k sounds like a huge salary to many people so there’s little sympathy or public interest in sorting it. I’d imagine it also affects a relatively small percentage of parents.

Yup. I should name change but won’t. But cliff edge for us means the financially sensible thing for me - and my 9+ years of education in a field I love working in and am good at, where my skills are needed - am better off £ wise at home with my kids (ideally FT but for my sanity part time). And yes it’s only for a few years while they are young etc. but it’s a high proportion of qualified working life if you’ve more than one child!!

solutions = childminder (less £ than nursery, especially for siblings). Condensed hours and on call weekends (when dh can be with the kids / but also has an impact on QOL for kids as have to turn down class party’s etc). No family locally so we swap one afternoon post school with another family (to save afterschool club fees and allow cheaper nursery structure that day). But in reality most of these I do as I like work- if I didn’t it would make the most sense to give it up for a few years entirely.

In SE, from what I’ve heard - the vast majority of parents that can salary sacrifice, go part-time or pension dump to avoid the cliff edge do. With two kids - and the new hours - even allowing for significant nursery top ups etc. you’d want to be earning 160+ to make up for the loss. Esp as often the slightly higher roles require significantly more input in terms of hours worked and/or task demand. There’s no incentive to earn it. Feels like a v contradictory policy when you hear people’s stories about how they avoid it!!

Agree. Have you looked at salary sacrifice schemes for nursery fees?

That’s not pension - that’s the income I need to earn to recoup the loss of benefits because I’m not eligible for free hours or tax free childcare.

You are missing the point - excluding higher earning parents from childcare support is creating some huge incentives for them to behave in a way which reduces tax take and is negative for the economy. That is not good tax policy.

It doesn't have to be sustainable. You just suck it up for a few years so as not to interrupt your career.

But how much is being paid into your pension?

This means I basically get no take home pay between £100-150k.

But an amount is going to pension long term gain .

Old days there was no support no free chikdcare it was much worse

It was introduced in 2010/2011. £100k in 2025 is roughly equivalent to 60k in 2010. It’s madness.

I put everything over 100k into my pension (I appreciate you’ve said you can’t do that)

Which scenarios involve forcing women to become SAHM?

Both earn over £100k -pension increase/cut down hours to under the threshold if they're that bothered, no one needs £200k plus to live on even in the southeast

DH earns £100k plus, DW earns £30k - surely better off if DH reduces salary to under the threshold or goes PT and DW stays working?

DW earns £100k plus, DH earns much less - DH becomes SAHD.

Either you are very shortsighted that you cant see paying more into your pension to get to £95k + 30 free hours works out financially better each month or you are on much more than £100k in which case you are living well above your means!

It basically says to women partnered to "high earning" men they shouldn't bother to work which is ridiculous. DH is on about 95k so we have to be really careful about his bonus and pay into pension.
My 22k part time salary is actually really useful to us as it isn't taxed as much. Plus I'm a teacher so I like to think useful to society that I work/ my own pension etc. Our actual combined salary is the same as two people on 65k so for the South East we aren't exactly rolling in it once you pay the mortgage etc. If I worked more days a week then I'd just pay it almost all back into childcare as the 30 hours is actually two days of stretched funding.
It's a complete quagmire basically! We are lucky we can afford to keep below 100k for him and I've found a childminder that accepts the funding without a load of extra charges!

Most of our friends are in a similar position although quite a lot of them just don't get the funding. We are all stopping at two kids as er can't afford any more.

Make childcare a universal benefit.

3% of parents are excluded from the system. Huge amounts of income is either going untaxed (pensions) or not being earned (part time work or people having to quit). It will pay for itself.

We’ve just decided to pay £20k into the pension, with a view to paying nothing into pension for a couple years once kids don’t need the free hours.

You have to factor in to your budgeting that you CANNOT earn over £100k. It’s what you have to do. There’s no way around it unless you earn £150k+, only then will your take home be higher than it is at £99,999 if you have two preschool children. That’s the insanity of our tax system.

And yes in the long term the government would be much better off if it gave everyone free childcare, but it cannot explain this to the public, so they cannot do it as people would think they’re giving handouts to the wealthy and we have less money for public services. A position has been engineered where EVERYONE loses. It’s madness.

Totally agree. There have been a number of interesting posts about this, I recall one that made some really good points about how much income tax is lost due to people (mothers mainly of course) going part time to come under the threshold (notably female GPs and similar). It's a ridiculous policy.

Also in SE and 100k income is really not that much after living costs...

It is completely insane.

With the new 30 hours from 9 months, I lose £15,000 on a £27,000 annual bill for one child.

I need to earn £35,000 over £100k to break even on earning £99k plus claiming the hours.

It gets worse. I have an older child, and lose 15 free hours and tax free childcare there too.

This means I basically get no take home pay between £100-150k.

Everyone I know earning <£200k seems to be doing some juggle of salary sacrifice or part time work. Insane tax system to incentive the top ~5% of earners (who pay about half of all income tax) to actively work less and reduce their tax bills.