Conservatives pledge to end £100,000 childcare cut-off

What happened

Parents earning more than £100,000 a year would retain access to childcare support under a Conservative proposal to remove the income ceiling from two government schemes. The pledge covers funded childcare hours in England and Tax-Free Childcare, which helps families meet bills through government contributions to an online account.

Conservative leader Kemi Badenoch set out the policy as party members gathered in Birmingham for their annual conference. It would take effect under a future Conservative government, rather than changing the entitlements available to parents now. The party puts the cost at about £700 million.

The proposal would abolish the upper earnings restriction altogether, rather than raise it or replace the sudden withdrawal of support with a gradual reduction. That means eligibility would no longer end because a parent's income had passed the £100,000 boundary, including for people earning substantially more.

At present, the income test applies to each parent individually. A family can therefore lose support because one parent's earnings exceed the limit, even when another household with a higher combined income remains eligible because neither adult crosses it. The Conservatives identify that distinction as a reason for changing the rules.

The party proposes paying for the extension by reducing staffing at a group of public bodies operating separately from government departments. It estimates that those reductions would save £1.6 billion by 2029-30, more than its projected cost of removing the childcare earnings limit.

The background

Since September 2025, eligible working parents in England have been able to receive 30 funded childcare hours a week for children from nine months old to four years old. The earnings ceiling restricts access to that working-parent entitlement, making the financial consequences relevant well before a child reaches nursery-school age.

A separate entitlement provides 15 funded hours for all three- and four-year-olds, irrespective of parental income. Crossing the earnings ceiling therefore does not remove every funded hour for children in that age group. The distinction between the universal entitlement and the additional working-parent support is important when assessing what a family stands to lose.

Tax-Free Childcare operates differently from the funded-hours scheme. Parents pay money into an online childcare account and the government contributes £2 for every £8 deposited. The government contribution can reach £2,000 per child each year, and the money in the account is used to pay for childcare.

The £100,000 earnings restriction also applies to that account-based support. Its removal would therefore affect both the number of funded hours available to eligible families and their access to help with childcare payments. The pledge is not confined to the nursery-hours offer alone.

Economists have criticised the abrupt loss of entitlement because a salary increase can leave a parent with less money overall once additional childcare bills are taken into account. This differs from a gradual withdrawal of assistance: passing a single income boundary can trigger a sizeable change in household costs.

The Centre for the Analysis of Taxation has projected that, by 2030, an average parent crossing the threshold would need earnings of £124,000 to regain the financial position they held before losing funded childcare. That calculation illustrates why the effect can extend far beyond someone receiving a small rise above £100,000.

The Conservatives also pointed to Institute for Fiscal Studies calculations concerning a parent with two children at nursery in London. In that example, earnings would need to approach £150,000 before the parent was better off than they had been just below the threshold. The example concerns a particular combination of location and childcare needs, rather than every family affected.

What people are saying

Speaking on the BBC's Sunday with Laura Kuenssberg programme, Badenoch linked the proposal to her argument that the tax and support system should encourage employment. She said parents should not face a financial disadvantage for increasing their work, and presented the policy as part of an effort to expand the economy.

Asked whether removing the ceiling would allow somebody earning £1 million a year to receive childcare support, she defended applying the approach regardless of earnings. Her response underlined that the proposal would extend eligibility across the income range, rather than target only those immediately above the existing cut-off.

Shadow education secretary Laura Trott highlighted the decisions families face over promotions, working hours and childcare arrangements. She argued that the current boundary creates difficulties for employers and nurseries as well as parents, and said abolishing it would give families greater freedom to organise work around their needs.

The Conservatives also argue that childcare costs can influence when people start a family. They say the existing restriction may encourage some prospective parents to postpone having children until their financial circumstances change, or decide against doing so. That forms part of the party's case for treating the proposal as a family policy as well as an economic measure.

Shadow chancellor Andrew Griffith placed the announcement within a wider ambition to simplify taxation and improve incentives for employment, investment and business activity. The party describes the childcare change as an opening measure in that programme, rather than a complete answer to the problems it identifies in the tax system.

What happens next

Griffith is due to develop the party's arguments about tax incentives in his conference speech on Monday. The Birmingham gathering is expected to provide a platform for further policies as the Conservatives build their programme for the next general election.

Badenoch arrived in the city on Saturday and sought to distinguish her party from the administration defeated at the 2024 general election. The Conservatives are currently polling behind both Labour and Reform UK, giving the conference a role in setting out an alternative offer to voters.

The proposed funding would come from reversing growth since 2016 in staffing at executive non-departmental public bodies. These organisations carry out national public functions while operating at arm's length from ministers; Arts Council England and the Environment Agency are examples of bodies within that category.

The financial plan therefore connects a wider childcare entitlement with reductions in public-body employment. Its two elements have different stated scales: an estimated childcare cost of about £700 million and projected staffing savings reaching £1.6 billion by 2029-30. Both sit within the Conservatives' programme for a return to government.

Why this matters

For working parents in England approaching the earnings ceiling, the practical issue is whether additional pay outweighs the childcare assistance they would lose. The calculations involving average parents and London nursery users show why salary alone does not capture the effect of a promotion on a family's finances.

For other households, the distinction between the schemes remains important: funded hours provide childcare time, while Tax-Free Childcare contributes towards payments. The Conservative pledge addresses the income barrier to both, but remains an election policy, not an immediate extension of the support parents can claim.