Earning £60k? Why You Are Still Eligible for £2,000 Free Government Cash
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| Earning £60k? |
Childcare in the UK is among the most expensive in the world. A full-time nursery place in London can easily cost £1,500 to £2,000 a month. It is like paying a second mortgage.
Many middle-class parents assume that government help is only for those on Universal Credit. They struggle in silence, paying full price.
This is a massive financial mistake.
There is a scheme called Tax-Free Childcare that is open to almost all working parents, including those earning up to £100,000 a year. If you are not using it, you are effectively throwing away £2,000 per child every year.
How It Works: The "Government Top-Up"
Think of this not as a "benefit," but as an online savings account for your kids.
- You open an online account on GOV.UK.
- You pay money into this account (e.g., £800).
- The Government instantly adds 20% extra (e.g., £200).
- Total in account: £1,000.
- You use this total balance to pay your nursery, childminder, or nanny.
The Limit: The government will top up a maximum of £2,000 per child per year (or £4,000 if the child is disabled). That is equivalent to getting basic-rate tax back on your childcare fees.
"But I Earn Too Much!" (The Eligibility Myth)
This is where the confusion lies. The criteria are surprisingly broad:
✅ Who Can Claim?
- Working Parents: Both you and your partner (if you have one) must be working.
- Minimum Income: You must each earn at least the equivalent of 16 hours/week at National Minimum Wage (approx. £183/week).
- Maximum Income: You must each earn LESS than £100,000 of "adjusted net income" per year.
💡 Pro Tip (The Pension Hack): If you earn £105,000, you are ineligible. BUT, if you contribute £5,001 into your pension, your "adjusted net income" drops to £99,999. You suddenly qualify for the £2,000 help!
It's Not Just for Nurseries
Another myth is that this stops when your child goes to school. No! You can use Tax-Free Childcare for children aged 0 to 11 (or 16 if disabled).
You can use the funds to pay for regulated providers including:
- After-school clubs.
- Holiday camps (football camp, drama club).
- Breakfast clubs.
- Registered childminders and nannies.
Tax-Free Childcare vs. 30 Hours Free
Don't confuse this with the "15 or 30 Hours Free Childcare" scheme. By 2026, the free hours scheme has fully rolled out to younger children. The best part? You can use BOTH at the same time.
| Scheme | What You Get (2026 Rules) | Can You Combine? |
|---|---|---|
| 30 Hours Free | Free hours for working parents of children from 9 months old up to school age. | YES. Use the free hours first to cover the core fees. |
| Tax-Free Childcare | 20% discount on the remaining bill (food, extra hours, holiday clubs). | YES. Use this to pay the outstanding balance. |
Conclusion
If you pay for regulated childcare and aren't using this account, you are voluntarily paying 20% more than you need to.
It takes 20 minutes to set up on the GOV.UK website. Even if your child only goes to a holiday camp twice a year costing £200, doing it through this account saves you £40. That’s a free family dinner. Claim it today.
Disclaimer: This article is for informational purposes only. You cannot use Tax-Free Childcare if you are claiming Universal Credit or Tax Credits. Also, you must switch from the old "Childcare Vouchers" scheme to open this account. Check your eligibility on the official GOV.UK Childcare Choices website.
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