30 hours free childcare in the UK: what families pay once the hours are counted

By Skyler Bissell · August 2, 2026 · 7 min read

A London household with a two-year-old and a four-year-old in full-time nursery still pays £34,000 a year after the funded hours are claimed. That is £2,833 a month, or about $45,333, for a benefit whose name contains the word free. The gap between the headline and the invoice is the entire subject of this post.

None of what follows says the entitlement is worthless. It says the entitlement covers a defined number of hours for a defined age, at a funding rate below what a London nursery charges, and everything outside that box is billed at market. Once you see which box you are in, the number stops being a surprise.

What the funded hours are

The phrase "30 hours free childcare" covers a stack of separate schemes with separate rules, and the stack differs by nation. Stripped down:

• England, universal: 570 funded hours a year for every 3 and 4 year old, usually taken as 15 hours a week over 38 weeks. No income test. In our model this is worth about £1,600 per child a year once it is apportioned across a household with one child in the qualifying age band and one below it.
• England, expanded: the additional hours that take the headline to 30, plus Tax-Free Childcare, both of which require every parent to be working and neither to be earning over £100,000 of adjusted net income.
• Scotland: 1,140 funded hours a year of early learning and childcare for all 3 and 4 year olds, roughly double England's universal offer, with no income test. Our model carries it at about £3,000 per child a year on the same apportionment.

Two things follow from that shape. The universal layer is the one a well-paid household keeps, and it is the smaller layer. And the nation you live in changes the size of the universal layer before income has been considered at all.

One household, worked through

Take a two-earner household on £138,750 between them, split roughly 60/40, renting three bedrooms, with children aged 2 and 4 in full-time care. Here is the London arithmetic, step by step.

Step one, the invoice. A full-time London place for a child in that age band is billed at £1,550 a month in our data, which comes from the Coram Family and Childcare Survey. Two children, twelve months: £37,200. That figure already assumes the family claims the funded hours it is entitled to, because the survey prices what parents hand over.

Step two, the universal entitlement. The four-year-old draws the 570 funded hours. Apportioned across the two children the model carries £1,600 each, so £3,200 comes off.

Step three, what is left. £34,000 a year, or £2,833 a month. Against this household's take-home of £101,590, that is 33.5%. A third of everything the two of them keep after tax goes to nursery, before rent.

Step four, the thing that does not arrive. Child Benefit, which a lower-earning UK family would draw, contributes £0 here. More on that below.

Now run the same household in Edinburgh. The invoice starts at £12,000, because a Scottish preschool place is priced at £500 a month against London's £1,550. The Scottish entitlement takes off £6,000 rather than £3,200. What remains is £6,000 a year, £500 a month, 6.2% of take-home. Same two children, same jobs, same currency.

The four UK cities we price

• London: £34,000 a year after entitlement, £2,833 a month, 33.5% of this household's take-home, about $45,333. Nursery is billed at £1,550 a month per child, and infant places run £2,150.
• Manchester: £12,400 a year, £1,033 a month, 12.2% of take-home, about $16,533. The preschool rate is £650 a month, under half of London's, on the same English 570-hour entitlement.
• Edinburgh: £6,000 a year, £500 a month, 6.2% of take-home, about $8,000. Scotland's 1,140 hours and a £500 monthly rate compound.
• Birmingham: £5,680 a year, £473 a month, 5.6% of take-home, about $7,573. The cheapest English city we price, at £370 a month per place.

The London figure is close to six times the Edinburgh one. Almost none of that is the entitlement: it is the market rate underneath, which the entitlement then trims. A funded-hours scheme is a discount on a price, and it inherits whatever that price happens to be.

The £100,000 line, and why it bites harder than it looks

The expanded entitlement and Tax-Free Childcare share an eligibility rule: every parent has to be working, and no parent may earn over £100,000 of adjusted net income. It is a threshold with no taper. £99,999 keeps the help. £100,001 removes it.

Three details make this worse in practice than the rule sounds. It is assessed per parent, so a household earning £190,000 split evenly keeps the help while one earning £150,000 split 101/49 loses it. It is adjusted net income, so a bonus, vested equity or a relocation payment can push a parent over a line they were nowhere near in January. And it interacts with the 60% marginal band that runs from £100,000 to £125,140 as the personal allowance is withdrawn, so the same pound of pay is taxed at a punishing rate and takes the childcare support with it.

For our London household this is already settled: the higher earner is over the line, so only the universal 570 hours survive. That is why the model nets £3,200 rather than the larger number a mid-income family would see. It is also the one place where a salary sacrifice arrangement has an outsized payoff, because reducing adjusted net income below £100,000 can restore support worth several thousand pounds.

Why Child Benefit shows as zero

UK Child Benefit is paid to everyone and then taken back from higher earners through the High Income Child Benefit Charge. The charge tapers from £60,000 of adjusted net income and reaches 100% at £80,000, at which point the household keeps nothing. Our UK households put the higher earner well above £80,000, so the engine carries Child Benefit at £0 and says so rather than quietly crediting money that would be clawed back.

That single modelling choice is worth flagging because it is where a lot of relocation spreadsheets go wrong. Someone reads the headline rate, multiplies by two children, and books a few thousand pounds of income that will never land. Compare it with Germany, where Kindergeld is universal and pays €6,216 a year for two children at any income, or Norway, where barnetrygd pays NOK 48,288. Those are transfers a British professional household does not have. You can see the whole spread on our child benefit by country table.

What Scotland costs on the other side

Moving to Edinburgh for the childcare is not free money, because Scotland runs its own income tax rates and they are higher over most of the professional range. The same £138,750 household keeps £97,404 in Edinburgh against £101,590 in London, so Scottish rates cost it £4,186 a year.

Set that against £28,000 of childcare saving and the trade is not close, for as long as the children are small. It also expires: when both children age out of nursery, the tax difference stays and the childcare difference goes. This is the kind of thing that decides a five-year plan rather than a five-minute one, and it is what the full comparison tool is built to keep straight across both sides at once.

Three numbers are worth checking before you sign a London offer with small children in the picture: the nursery rate for the age your child will be when you arrive, whether either salary crosses £100,000 of adjusted net income, and what the household keeps after tax on both sides. Our New York vs London family comparison runs all three together, and the wider picture of what children do to a household budget is in the cost of raising kids breakdown.

FAQ

Do I get 30 hours free childcare if I earn over 100k?

No. The expanded entitlement and Tax-Free Childcare both stop once either parent's adjusted net income passes £100,000, and it is a hard line with no taper. What survives is the universal early education entitlement, 570 hours a year in England for 3 and 4 year olds, which our model carries as about £1,600 per child a year across a two-child household. One parent crossing £100,000 removes the help from the whole household, however little the other parent earns.

Are the funded hours free in practice?

The hours are funded, but nurseries are allowed to charge for meals, nappies, trips and any consumables, and for the hours you use beyond the entitlement. In practice a London full-time place is billed at about £1,550 a month for a preschool-age child even with the funded hours claimed, which is why two children still carry a £34,000 annual residual.

Is childcare cheaper in Scotland than in England?

Substantially, for two separate reasons that stack. Scotland funds 1,140 hours a year of early learning and childcare against England's universal 570, and Scottish market rates outside the south east are far lower: our Edinburgh preschool rate is £500 a month against London's £1,550. The result is £6,000 a year for two children in Edinburgh against £34,000 in London. Scottish income tax takes £4,186 more from the same household, so the childcare saving is roughly six times the tax cost.

Can expats claim the free childcare hours in the UK?

The universal early education hours follow the child's age and residence, so nationality is beside the point and a newly arrived family with a 3 or 4 year old normally qualifies. The income-tested schemes are different: Tax-Free Childcare requires both parents to be working and neither to be over £100,000, and immigration status carrying no recourse to public funds can exclude a household from some support. Check each scheme on its own terms; the package does not move as one.

More in this series

• Why is daycare so expensive?: the same two children priced across 28 US metros.
• Kita cost Germany: eight cities, five of which bill nothing.
• Barnehage cost Norway: what a national price cap does to the bill.
• Kinderopvangtoeslag for expats: the Dutch refund at the high-income floor.
• Childcare subsidies and US income limits: America's version of the same cliff.

Sources. Entitlement rules and thresholds from gov.uk's 30 hours free childcare guidance and gov.uk's Tax-Free Childcare page; the Scottish entitlement from the Scottish Government's early learning and childcare policy. The Child Benefit clawback is HMRC's High Income Child Benefit Charge. Market nursery rates come from the Coram Family and Childcare Survey. Field-level provenance is in data/_meta.json; the method is on the methodology page.

Figures here come from cityparity's per-city engine and were current at publication; nursery rates, funding rates and thresholds move, so treat any single number as a strong estimate and run your own inputs. See the methodology.