The Conservative Party plans to scrap the £100,000 income limit for government-funded and tax-free childcare, citing the need to remove work disincentives.
Key facts
- •The current £100,000 income threshold disqualifies parents from receiving government-funded or tax-free childcare support.
- •The Conservative Party plans to remove the threshold entirely to eliminate work disincentives.
- •The policy is estimated to cost £700 million, to be funded by £1.6 billion in savings from reducing staff in executive non-departmental public bodies.
- •The change is intended to address the current system's reliance on individual rather than household income calculations.
- •Shadow chancellor Andrew Griffith is expected to discuss the party's broader tax agenda during his conference speech on Monday.
Conservative leader Kemi Badenoch has announced plans to abolish the £100,000 income threshold that currently disqualifies parents in England from receiving government-funded or tax-free childcare. Speaking ahead of the party's annual conference in Birmingham, Badenoch described the existing system as an "absurd cliff edge" that discourages work. The policy is intended to ensure that high earners are not penalized for increasing their income, with the party framing the change as both pro-family and pro-growth.
By the numbers
Policy Details and Funding
Under current rules, working parents in England are eligible for 30 hours of free childcare for children aged nine months to four years, provided both parents earn less than £100,000 annually. This same threshold applies to the government's tax-free childcare scheme, where the state contributes £2 for every £8 deposited into a childcare account, up to £2,000 per child per year. The Conservatives intend to remove this limit entirely, regardless of individual income levels. The party stated the policy would be funded by reducing the number of public servants employed in executive non-departmental public bodies, such as the Environment Agency and Arts Council England. This measure is projected to save £1.6 billion by the 2029-30 financial year, which the party says will cover the estimated £700 million cost of removing the childcare threshold.
Economic Rationale
The Conservatives argue that the current threshold creates unfairness by calculating eligibility based on an individual's income rather than total household earnings. Economists have criticized the limit, noting that it can leave parents financially worse off even after receiving a significant pay rise. By removing the cliff edge, the party aims to prevent people from limiting their work hours or delaying starting a family due to tax system disincentives. Shadow chancellor Andrew Griffith described the move as the first step in a broader mission to simplify the tax system.
Timeline
- September 2025Working parents in England became entitled to 30 hours of free childcare for children aged nine months to four years.
- SaturdayKemi Badenoch arrived in Birmingham ahead of the annual Conservative Party conference.
- MondayShadow chancellor Andrew Griffith is scheduled to deliver a speech on the party's tax agenda.
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This article was independently rewritten by ManyPress editorial AI from reporting originally published by BBC Politics.
