Page 11 | Loss of 30 free hours will cost me £37,000 of pre-tax income

ChildcareCost · 2025-08-15T08:59:44+00:00

9 month olds are eligible for 30 free hours from September. If you earn over the threshold, you do not get this 30 free hours plus the £2,000 of tax-free childcare. My nursery typically charges £2,150 a month for an under-3. This works out at c. £10 an hour assuming a 50 hour week (open 8-6). They have circulated the free hours schedule this week, and the monthly cost with 30 free hours is £1,100 hours for an under-3 (noting funded hours only cover 38 weeks). This means the loss of the 30 free hours will cost me £12,600 a year. Plus of course the loss of tax-free childcare at £2,000. So, I need to earn an extra £14,600 net just to cover the cost of not being eligible for this scheme. *To earn that £14,600 over £100,000 – I need to earn a gross figure of £137,000.* Surely this is not fair on the parents excluded from the scheme? It doesn't seem proportional that I need to earn an extra £37,000 _jus_t to recoup the loss as a result of not being eligible!

IvyIvyIvy · 15/08/2025 12:06

Just salary sacrifice down to the cut-off for a couple of years. It's only going into your own pension pot for your own use later.

Original poster

ChildcareCost · 15/08/2025 12:07

Ohmygodthepain · 15/08/2025 12:05

Your take-home is nearly £8k a month and you're quibbling over £1k a month childcare.

Imagine how much of a RELIEF that drop is going to be to families who earn less than a quarter of yours, and who have been paying almost their whole salary towards childcare up to now?

A friend of mine was working for LESS than she earned when factoring childcare and travel to work

Read the room.

You're not entitled to Child Benefit either op, how much does THAT 'cost' you a year?

I have no issue with other families being able to claim the childcare hours. I’m not sure why this keeps coming up - is the assumption I must be against it? Why?

Yes over £1,000 a month is still a lot of money, and as I say I need to earn an extra £37,000 gross to actually get that money to pay the difference.

My actual childcare bill is over £2,000 a month for once child.

OP posts:

Elektra1 · 15/08/2025 12:07

This issue is well covered online and in the media. The answer is to put more into your pension so as to keep taxable income below £100k.

AlexisP90 · 15/08/2025 12:08

SumUp · 15/08/2025 11:59

As someone who used to be a high earner, please change your attitude. It is a privilege, often a hard won one, to bring in a high income and be a net contributor.

This scheme is mainly intended to help parents work who would otherwise not be able to afford to, and give the ‘squeezed middle’ some help to raise the next generation during the most expensive years. It may help enable lower paid professionals such as key workers (who we all rely on) to be able to afford kids.

You should have enough coming in to make a savings, pension and investment strategy for yourself and family. Focus on this, and your career goals. What do you want to achieve - what difference do you want to make professionally? If you are considering working less due to this reasoning, you’re in the wrong job.

THIS. Free hours are to support those who would massively struggle to SURVIVE without it. Its not a nice top up..

Yes, there are some in the middle entitled to it who aren't absolutely in dire straights.

Me and DP claim free hours. I earn £70k and he earns significantly less. Could we survive without it? Maybbee. We wouldn't starve but we couldn't have any days out or do any activities without it (mortgage is through the roof and killing us a bit right now)

We don't and have never been entitled to any other benefits.

With all these things there has to be a limit
Is the limit fair? I don't know but in all benefit cut offs some people win, some people lose and some people just about survive.

Gotta be real here at £160k you aren't going to be in poverty.

And its not like its forever. This is for a few years.

Boohoo76 · 15/08/2025 12:08

I think we should have universal low cost childcare like most European countries. I would encourage you to leave the UK if you can OP. Either go to a country where you actually receive something in return for paying higher taxes, or to a country where tax is much lower. The UK is the worst of both Worlds.

numbfromlife · 15/08/2025 12:08

I'd reduce my hours and let the government miss out on my tax dollars.

Starzinsky · 15/08/2025 12:08

It isn't fair in that those that pay the most into the tax system get excluded from tax payer funded things, but unfortunately we are not a country that rewards hard work.

Annoyeddd · 15/08/2025 12:08

Perhaps drop down to three days a week - you will be below the threshold plus the childcare will cost less to start with. If enough people did this then there would be more jobs to go round particularly for all those brilliant graduates and young people

DodoTired · 15/08/2025 12:09

@Jellycatspyjamas

current rules ENCOURAGE people to minimise their tax burden because of this dumb 100K rule.

high earners disproportionately contribute to the cost of public services by the way.
people earning less than 50K are net TAKERS from the system. Recent figures show that the top 5% earners contributed 48.8% of income tax (!!!) - around £147 billion. And top 1% of these - 28%.
you literally have 95% of workers beaning heavily subsidised by only 5%, this is nuts and not sustainable but also means they don’t deserve regular bashing

OP has not complained about people having children or that she has to contribute, it’s just weird argument that’s the same people - you made it up.it could be just as easy someone making 60K complaining about these but it’s completely irrelevant

bottom line.
The threshold is idiotic especially given its per person so a household earning £198K will be eligible as long as both earners have less than 100K and household earning 101K with one earner is not.
the policy is unfair AND it produces negative results for taxpayers because it encourages people to reduce the tax they pay

cauliflowercheeseplease · 15/08/2025 12:09

You earn over 160k and still claim free childcare? Wtf.

BIossomtoes · 15/08/2025 12:11

Here’s an idea. Maybe those employers whose profits allow them to pay such high salaries could invest in subsidised childcare? There used to be workplace nurseries, I have no idea if they still exist. Employer runs a nursery, charges the employee on a sliding scale based on salary and writes the cost off against corporation tax. Everyone’s a winner.

numbfromlife · 15/08/2025 12:11

Boohoo76 · 15/08/2025 12:08

I think we should have universal low cost childcare like most European countries. I would encourage you to leave the UK if you can OP. Either go to a country where you actually receive something in return for paying higher taxes, or to a country where tax is much lower. The UK is the worst of both Worlds.

This is pretty much what we did. Sick of always paying and finding it tough because we were always only just above the thresholds, we went to another country where we are still often above the thresholds, but somehow are much better off anyway. It makes the difference between always feeling on the financial edge or managing vs. feeling like we are able to pay the bills comfortably.

RimTimTagiDim · 15/08/2025 12:12

The entitlement is staggering. You can afford to pay some hugely underpaid nursery workers to look after your child, so do it and stop whining.

StatisticallyChallenged · 15/08/2025 12:12

Elektra1 · 15/08/2025 12:07

This issue is well covered online and in the media. The answer is to put more into your pension so as to keep taxable income below £100k.

Which is what many do, and ultimately ends up costing the tax payer more - loss of tax take and paying out the childcare costs anyway.

If you made it universal or tapered it, individuals who are currently actively reducing their income wouldn't do so which could have a net benefit for the country. It depends how many are so far over that they suck it up, vs how many are taking active steps to suppress taxable income.

Teaforthetotal · 15/08/2025 12:12

While I think the OP can afford her own childcare it isn't right that net contributors receive nothing. It disincentivises becoming a high earner. As someone said up thread in a well designed universal tax system everyone feels like they're a winner.

SumUp · 15/08/2025 12:12

Imperativvv · 15/08/2025 12:00

This.

Which is why I think OP would've done better to frame the issue in these undeniable terms, rather than making it about people's subjective notions of fairness.

Although it would probably have turned into that anyway, if previous threads on the issue are anything to go by.

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Yes this is a good call.

The OP should go beyond how it affects her as an individual to framing this issue along the lines of:

how many households does this affect?
what evidence is there that this changes behaviour in high earners
what tax policy changes could be made to make this work better?

And be in dialogue with her MP about it.

If she really wants the system to change rather than just venting.

LadyLapsang · 15/08/2025 12:12

OP, I totally agree with you and think it is an unhelpful nudge for parents who want to perform and progress their careers at the highest level. This country needs more people to be economically active and be net contributors - you are both. Well done and thank you. Childcare should not be means tested in this way. I also disagree with means testing Child Benefit.

KarmaKameelion · 15/08/2025 12:12

Boohoo76 · 15/08/2025 12:08

I think we should have universal low cost childcare like most European countries. I would encourage you to leave the UK if you can OP. Either go to a country where you actually receive something in return for paying higher taxes, or to a country where tax is much lower. The UK is the worst of both Worlds.

I honestly think this will happen more and more. I want my dc to go to school here but after that will go back to my country of birth. I have been here for over thirty years paying taxes and getting fuck all out of it… the NHS is awful, public transport awful, London is a shit hole.

see a lot more of that happening… and who will be left?

FairKoala · 15/08/2025 12:12

I sort of get what ChildcareCost
is saying in regards to the cut off being so exact it will mean that the government will end up losing out by people paying more into a pension to get themselves under the threshold.

Surely you would have a taper off scheme so that getting under £100,000 per year would only net you a smallish amount as opposed to the all or nothing amount. Maybe trial the taper off scheme for people earning over £80,000-£120,000 and see if that saves more money as people won’t bother trying to fudge their figures to claim everything. Maybe they will just not bother if it only nets them a small percentage of their overall childcare costs

DodoTired · 15/08/2025 12:12

Annoyeddd · 15/08/2025 12:08

Perhaps drop down to three days a week - you will be below the threshold plus the childcare will cost less to start with. If enough people did this then there would be more jobs to go round particularly for all those brilliant graduates and young people

there will be less tax being paid and more benefits taken out…

are you then going to complain about state of our public services?

let’s all just work less and pay less tax and see where it will get us

Teaforthetotal · 15/08/2025 12:12

StatisticallyChallenged · 15/08/2025 12:12

Which is what many do, and ultimately ends up costing the tax payer more - loss of tax take and paying out the childcare costs anyway.

If you made it universal or tapered it, individuals who are currently actively reducing their income wouldn't do so which could have a net benefit for the country. It depends how many are so far over that they suck it up, vs how many are taking active steps to suppress taxable income.

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Correct.

SecretNameAsImShy · 15/08/2025 12:13

KarmaKameelion · 15/08/2025 11:56

But what about 2 earners in one house hold who earn 99k and therefore total income of 198k and they are eligible. Is that fair?

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No, not at all. I don't think it should be anything like £99k. I think it should be the total household income not per person. I've always believed that.

I lost child benefit when my husband's salary went over £60k. I was earning a much smaller salary (£15k) and the loss of the benefit hit us quite hard.

RimTimTagiDim · 15/08/2025 12:13

Teaforthetotal · 15/08/2025 12:12

While I think the OP can afford her own childcare it isn't right that net contributors receive nothing. It disincentivises becoming a high earner. As someone said up thread in a well designed universal tax system everyone feels like they're a winner.

Get nothing except a salary sufficient for all their basic needs and a shaftload of luxuries.

Annoyeddd · 15/08/2025 12:14

DodoTired · 15/08/2025 12:12

there will be less tax being paid and more benefits taken out…

are you then going to complain about state of our public services?

let’s all just work less and pay less tax and see where it will get us

Show quote history

But there will be less benefits as less unemployment

Janie143 · 15/08/2025 12:15

This is what happens when thresholds are frozen whether it's income tax or cutoff levels or schemes like this against a backdrop of high inflation. High earns who have the ability to leave the country or ways round it by paying into pensions etc will. Thus making the sitatuion of raising revenues to pay for services even harder.