The UK government is set to review the income thresholds that determine eligibility for funded childcare, as annual spending on early years entitlements climbs to £9 billion, Education Secretary Bridget Phillipson has revealed.
In an interview with the Financial Times, Phillipson said the government is examining “every element” of the childcare system to ensure it delivers the “best possible outcomes” from the significant public investment.
“We are going to continue to look at eligibility through the childcare review that we’re undertaking, and it does need to be simpler for parents,” she said.
The current rules in England require at least one parent to earn the equivalent of 16 hours a week at the national minimum wage to qualify for the extended 30-hour entitlement. On the upper end, neither parent’s adjusted net income can exceed £100,000 per year.
Families meeting these criteria can access 30 hours of funded childcare per week for children from the term after they turn nine months old until they start school, a policy fully rolled out from September 2025.
Introduced by the previous Conservative government in 2017, the scheme aims to boost economic growth by making childcare more affordable, encouraging parents to return to work sooner after having children, and supporting early childhood development.
However, the thresholds have remained unchanged since their introduction, creating challenges on both ends of the income spectrum.
For higher earners just above the £100,000 cap, even a small pay increase can result in losing eligibility entirely, leaving families substantially worse off.
At the lower end, children whose parents fall below the minimum working threshold may miss out on the extended 30 hours, potentially limiting their access to high-quality early years education and preparation for school.
Phillipson, speaking at a primary school in London with its own nursery, highlighted the “many quirks” that have accumulated in the system over the past decade as various support elements were added piecemeal.
“It does make sense to make that more coherent, more straightforward, both for the sector but also for parents too,” she said.
The education secretary emphasised a focus on value for money and better outcomes, noting that spending on early years entitlements will reach £9 billion annually starting next year.
She indicated the review would consider all aspects of the system ahead of the next general election, though government officials stressed that changes to the thresholds are not imminent and would be part of a broader overhaul of childcare services.
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