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 £22,491 a year with the funded hours already claimed and priced in. That is £1,874 a month, or about $30,100, 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 its value sits inside the monthly out-of-pocket figure itself, because our source, the Coram Family and Childcare Survey, prices what parents actually hand over with the funded hours claimed.
• 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.

Two things follow from that shape. The universal layer is the one a household keeps when either parent crosses the £100,000 ceiling. 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 is the baseline before the additional working-parent hours and Tax-Free Childcare modeled below.

Step two, the help. The universal hours are already in the baseline. Both parents also meet the working-parent income tests: the model deducts £10,709 for the additional funded hours, then £4,000 of Tax-Free Childcare, leaving £22,491. The funded-hours deduction apportions the baseline fee by hours; it is a model estimate rather than a provider quote.

Step three, what is left. £22,491 a year, or £1,874 a month. Against this household's take-home of £101,590, that is 22.1%. Just over a fifth 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. A Scottish preschool place is priced at £790 a month against London's £1,550, with Scotland's 1,140 funded hours already inside that price. The bill lands at £15,168 a year after Tax-Free Childcare, £1,264 a month, 15.6% of take-home. Same two children, same jobs, same currency.

The four UK cities we price

• London: £22,491 a year with the entitlement priced in, £1,874 a month, 22.1% of this household's take-home, about $30,100. Nursery is billed at £1,550 a month per child, and infant places run £2,150.
• Manchester: £13,604 a year, £1,134 a month, 13.4% of take-home, about $18,200. The preschool rate is £995 a month, well under London's, on the same English 570-hour entitlement. The cheapest English city we price.
• Edinburgh: £15,168 a year, £1,264 a month, 15.6% of take-home, about $20,300. Scotland's 1,140 hours and a £790 monthly rate compound.
• Birmingham: £14,972 a year, £1,248 a month, 14.7% of take-home, about $20,000, at £1,095 a month per place.

The London figure is about half as much again as Edinburgh's after the modeled help, and the driver is the market rate underneath: a funded-hours scheme is a discount baked into 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.

Our London household stays below the £100,000 line: the two salaries are £83,250 and £55,500. The model therefore includes the additional funded hours and Tax-Free Childcare. A parent crossing the ceiling would lose those income-tested reductions.

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 takes 1% of the benefit for every £200 the higher earner sits over £60,000 of adjusted net income and reaches 100% at £80,000, at which point the household keeps nothing. Our engine runs that charge on the higher earner's pay for every household it prices. This page's household has its higher earner on £83,250, past the ceiling, so Child Benefit nets to £0 here, and the calculator says so rather than quietly crediting money that would be clawed back. Move the higher earner under £80,000 and the calculator credits the share that survives.

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 the £7,323 childcare saving against £4,186 of extra Scottish tax, and Edinburgh leaves this household £3,137 ahead on those two lines while both children are in care. 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, whose value is already inside the monthly out-of-pocket figures we carry, because our source prices what parents actually pay. One parent crossing £100,000 removes the extra help from the whole household, however little the other parent earns.

Are the funded hours free in practice?

The hours are funded, but extra hours and chargeable items can leave a bill. Our London baseline is £1,550 a month per child before the additional working-parent reductions; after those reductions and Tax-Free Childcare, this household pays £22,491 a year for both children.

Is childcare cheaper in Scotland than in England?

For this household, the modeled childcare bill is £15,168 in Edinburgh and £22,491 in London after the applicable help. Edinburgh saves £7,323 on childcare and costs £4,186 more in income tax, leaving £3,137 a year across those two lines.

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.