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

[Saladleaf]

I completely understand that on paper, a six-figure household income sounds like a lot. I’m not trying to be ignorant of the fact that many people are struggling far more. But for anyone actually living it, especially in the South East, the reality feels very different once you factor in childcare costs.

We’re looking at full-time nursery fees of around £2,500 a month per child, and I honestly don’t know how families are supposed to make it work once you hit the £100k cliff edge and lose access to the 30 free hours. It’s completely unsustainable.

I know some people say you can get around it by putting more into your pension so your income technically falls below the threshold, but that just isn’t realistic for everyone. With the cost of living, mortgage, and general expenses, we simply can’t afford to take home hundreds less each month. We already don’t have holidays, don’t buy new clothes, and don’t even have a car. There isn’t any more to cut back.

It’s not even about wanting handouts, it’s that full-priced childcare in this country is so eye-wateringly expensive that it makes working impossible for many women. The system actually discourages the lower earner, usually the mother, from staying in work.

A friend of mine is a good example. 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. We worked out that if they have a baby, it would literally cost them money they can't afford for her to keep working once childcare, rising mortgage payments and bills are factored in. She’d have to give it all up. It’s so demoralising.

And the whole system makes no sense. Two people earning £99k each can claim free hours, but one person earning £100k can’t. Someone on £50k with one child gets support, but a couple on £100k with two children get nothing, even though their childcare costs are double and they are taxed more. It’s not unreasonable to have worked hard, built a decent career and want two children, but the government seems to penalise you for it.

Other countries manage to offer affordable childcare to everyone because they see it as essential. Here it just feels like you’re being punished for trying to do well. For those of us in the South East, it’s even harder. Living costs are sky high, childcare is extortionate, and it’s not realistic to just move somewhere cheaper when your jobs and lives are here.

It feels like you’re being backed into a corner. I find it so demoralising that the system seems designed to push mothers out of their careers, especially when you’ve worked so hard to build one in the first place. AIBU in feeling like this?

People's incomes aren't necessarily stable, particularly women's. Let me explain a very common scenario for women at my workplace.

Graduate mid-20s (usually with masters). By around 30, climb up to the level earning £100k+. Student loan payments shoot up but at least the balance is going down from the 2 degrees and you'll be home free soon.

Great maternity package so stay for a kid or two. Just about manage to make it work for this period, using pregnancy accommodations, taking a non-client facing role temporarily when coming back, etc. Kids will be out of nursery then you'll be home free soon.

Realise by the time the kids start school that this life is not compatible with family and quit for a job earning say £80-90k on better hours.

On paper, there was a period where you earned up to £150k for a few years. Incredible right? But you never got to reap the fruits of it because you either sacrificed into pension or took massive tax hits during the short window of time you had that salary. That could have been a period of building a nest egg and getting ahead on the mortgage etc. But it's just wasted.

And pension sacrifice doesn't pay the bills today. You live in London, mortgage is £3k+, childcare for 2 is £5k+ - you can't pay that on £99k gross. I don't sacrifice into pension beyond employer payments because our household would not be able to make ends meet.

Based on 1 child, single parent with £2.5k a month additional nursery costs (as estimated by previous posters, since I’m past nursery stage), autoenrolment pension and type 1 student loan, someone on £100k takes home £60k, less £30k nursery leaving £30k. Someone on £50k takes home £35k.

Well if they are only just on £100k all they need to do is chuck £1000 extra in their pension and they get their 30 free hours and take home £59K

IMO nursery costs should be tax deductible - in the year that the income is earned and the costs are paid out.

I think that's a plausible example and a consequence of assessing our income only on an annual basis (for tax) - when in reality it's more complicated than that.

But if you sacrificed £50k out of that £150k a year to take you under the £100k, then won't that mean you aren't paying all that childcare? And if you do it for 2 years that's a total of £100k into the pension which is significant. (Although you'd likely have put a good chunk of that in anyway.) So you do get some of the benefit, it's just delayed and you get it as a pensioner (or you reduce pension contribution in subsequent years)

But I agree £100k isn't as much as it sounds. Partly because of inflation recently. You see this in other posts with people on lower incomes wondering why they suddenly can't afford things they used to. The answer is their income has been eroded. But the headline number still sounds a lot.

That’s exactly what people do and so the government doesn’t get the tax on that income, but wouldn’t you expect to see some benefit to earning that amount? The rules just don’t make sense.

Also, the person I was replying to was making a comparison to someone earning half the amount (so £50k) - I was explaining why there can be little difference

No, most employees don't put anywhere near enough away in their pensions, this would just be good financial management anyway.

And if you are earning way in excess of the 100k mark then the silly fiddling with numbers people are doing to claim they are "worse off" just doesn't wash.

Sure, the pension value is non-zero. It just doesn't help today with bills - I can't sacrifice down to £100k because that plus my partner's income doesn't cover our housing, loan repayment and living costs. FYI - we live in a 2-bed ex council terrace in zone 3 London, not a rough area but not posh either. But we bought recently with a 10% deposit, no family money, so exhausted all our savings and have a huge mortgage.

I appreciate that many people literally can't do that, but I guess my point is the only way I can earn that flashy income is by living in London and paying exorbitant nursery costs this year, not in the future.

Agreed - it should be £100k per HOUSEHOLD.

But still - sorry but you’re going to have to suck that up. £100k is enough. Make some lifestyle changes. It’s what we did and it is not forever.

Why should it be £100k per household? That would exclude far more people and be vastly counterproductive.

What silly fiddling?

Once again, you have missed the point of how the threshold impacts behaviour - and overall tax take.

I earn 1p over £100k, and I lose benefits to the tune of £22k (which is £50k pre tax). The incentives for me to claim the benefit are huge - and if I do so, the government loses ~£26k in tax on that £50k. Plus of course - has to pay me the £22k in childcare support.

No one is just going to ‘suck it up’ when the sums are so enormous.

I think what about of people don’t realise is that with the expansion of the free hours from 9 months not being funded properly, the private nurseries had to whack up the costs on those not receiving the subsidised hours. With this, plus the NI increase, our nursery put fees up 30% this year. With one month’s notice! So it’s now £2574 a month for the baby, and a little less for the toddler. But that’s basically £5k a month on nursery. That doesn’t leave much over out of that £7k figure you mention for mortgage, bills, food, £600 a month commute into London….

I wouldn’t have had an issue with paying the original amount of nursery. It was expensive but just over £1.8 k per child. But to have it go up to cover others free hours, while also paying 62% tax and not receiving any free hours myself makes it really tough for us. We have accumulated a lot of debt. I cannot drop a day, flex working request turned down.

Exactly!

I don't mind paying a bit more than others reflecting that I proportionately earn a bit more than others.

But paying disproportionately more income tax
Higher base costs of nursery
No discount on nursery

How many more times over am I expected to pay?!

We both worked opposite shifts when the children were small. It wasn’t easy, but it meant we never had to use nursery or childcare. We definitely wouldn’t be able to afford nursery nowadays. The children are only little once, enjoy them while you can. Parents evening, sports days, school fetes, etc are all so important for a small child to have parent there and I would never have wanted to miss any of that for a career. Pensions, investments etc are unimportant in the grand scheme of a happy family and more importantly a happy child. You can always catch up with pension later on in life. Just my opinion

It is insane. I’ve managed it by going part time (compressed hours to manage a day off with only 10% reduction in salary) and the paying the maximum amount into my pension. I earn a base salary of £120k, usually £20k bonus plus car allowance

Better to give it to pension than the tax man if there’s no way around it as at least you’re benefiting your future self.

A friend of mine is a good example. 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. We worked out that if they have a baby, it would literally cost them money they can't afford for her to keep working once childcare, rising mortgage payments and bills are factored in. She’d have to give it all up. It’s so demoralising.

I mean, that kind of sucks, but it sucks because of their planning.

We planned our career moves around having a baby and house moves. First I retrained, then shifted to a better paying role, then my husband moved jobs after he'd used paternity entitlements. Then we'll move house and I'll go freelance in time for his school start.

I agree that there are issues with the childcare allowance, but no system in the world is going to incentivise every career path.

YANBU at all.

OP, this is MN. If you are anywhere on the scale other than the breadline, you will be absolutely annihilated. And if you dare complain about getting by on your income, you will be told to ‘read the room’, ‘check your privilege’ and all the other cliches.

People seem to hear “£100k household income” and picture champagne fountains and designer handbags, when in reality it’s just normal working families trying to stay afloat — especially in the South East, where the cost of existing is absurd.

Childcare isn’t a luxury; it’s infrastructure. The whole “cliff edge” is completely nonsensical. Two parents earning £99k each can still get support, but a single earner just over £100k loses everything? It’s not about greed, it’s about the system making zero logical sense.

You’re absolutely right — it ends up punishing ambition and pushing women out of work. Most families in that bracket aren’t living extravagant lives. Once you factor in tax, NI, mortgage, nursery fees, and rising costs, there’s barely room to breathe.

It’s not asking for handouts — it’s asking for a system that doesn’t make working parents regret… working. Other countries see childcare as a social investment. Here, it’s treated like a moral test of character.

You’re spot on: it’s demoralising, unfair, and completely avoidable if policymakers actually looked beyond the spreadsheet and saw how people are living.

What if her job is really useful to society like a hospice nurse or cancer researcher? What if her marriage is financially abusive? What about her own pension? What about her student loan which will still need to be paid off? What about her career progression?

Just become a SAHM isn't good enough in 2025. Plus going down to one income in this climate isn't a great idea.

IF both partners can work part time with no repercussions to their careers and share childcare then I think it's great but lots of jobs don't allow this.

What’s your issue with tax bands? What would you rather see happen? I think they are quite fair apart from the ridiculous marginal rate at £100-125k. I’d give everyone a personal allowance and put a penny on higher rate tax to pay for it.

An alarmingly high proportion of people think that if you are a higher rate taxpayer (40%) then every penny you earn is taxed at 40%.

Also, wait until you meet student finance.

After posting my initial comment, I went back to read the thread thoroughly and noticed several posts criticizing women who choose to be stay-at-home mothers.

As someone who became a SAHM by choice after careful planning, I find it absurd to criticize this decision. I believe being a SAHM isn't an issue for any woman who has thoughtfully prepared for it—I personally chose a high-paying career and did everything possible to secure my future before taking this path, making deliberate decisions before marrying my husband. Marrying someone you don't trust is simply a bad choice. Too many women end up choosing the wrong men as husbands and then spend their time lamenting and regretting their poor decisions.

I’m a SAHM with passive income and a high-earning husband. We’ve worked hard and continue to do so to protect what we’ve built—saving, investing, and making smart decisions. Taxes already take a big chunk, and we expect next year to be even tougher. So, we’re taking reasonable and legal steps to avoid paying more than necessary. It’s not selfish; it’s just being prudent.

This. All day long. How is it that things have got this bloody dire that to live in London in an ex-council house, you are struggling to make ends meet on a salary well over £100k. The system is broken. And people don't understand that - but as inflation rises and the headline figure of £100k is eroded more and more, an increasing number of people are going to experience this. The fact is, in London, over £100k just isn't enough.

We pay over £3000 a month in rent and bills, then £2500 a month on childcare. That'll be leaving small change for living on quite a way over £100k given the sheer amount you get taxed from £100-150k.

My point is also, women I know are literally realising they're going to be locked out from working in the near future if they choose to start a family. It's shameful.

Although my numbers were all much smaller, and there was no CC funding, we did find we lived on a really tight budget when the children needed nursery in the 90s. Then, when they both went to school, as I was part time I worked school hours and it did feel like we had released a mortgage level of money each month, and things got much easier financially.

Those years were definitely the worst.

Second worse was moving house and negative equity!

Easy to say that - firstly, I'd have no career to go back to with a career break of a few years. Secondly, being a SAHM with no support, potentially two children to look after, and no chance of either being able to do any time at all in nursery or with a childminder to give me a break. And being able to not afford classes, activities, holidays, or anything enjoyable. And older DC having to go to school without ever having gone to nursery or preschool as we literally could not afford it. It's not mentally appealing to me sorry.