UK childcare support explained (2025/26)
Childcare is one of the biggest costs for working families, but several government schemes can cut the bill dramatically: funded free hours, Tax-Free Childcare and the Universal Credit childcare element. Knowing which you qualify for, and which combine, makes a big difference.
Funded early-years hours
In England, funded childcare hours have expanded significantly:
- 15 hours for all 3 to 4 year olds, regardless of income.
- 30 hours for 3 to 4 year olds of working parents.
- 30 hours for children from 9 months of working parents, following the September 2025 expansion.
Funded hours cover 38 weeks a year (term time). You can "stretch" them over more weeks at fewer hours per week if your provider allows.
The 20% top-up
Tax-Free Childcare (TFC) gives you £2 for every £8 you pay in, up to £2,000 a year per child (£4,000 if disabled). Both parents must generally work and each earn under £100,000. You pay into an online account and the government tops it up, effectively a 20% discount on childcare costs.
The 85% childcare element
If you're on Universal Credit and working, you can claim back up to 85% of childcare costs, capped at around £1,015 a month for one child and £1,739 for two or more. This is far more generous than TFC for lower earners, but you cannot have both.
The £100,000 cliff edge
A two-year-old, 40 hours a week
A two-year-old of working parents under £100k needing 40 hours a week at £7/hour costs about £14,280 a year gross (51 weeks). With 30 funded hours over 38 weeks saving roughly £7,980, and Tax-Free Childcare giving 20% off the remainder, the net cost falls substantially, often by more than half once both schemes are applied.
Common childcare cost mistakes
- Trying to combine TFC and UC. You must choose one; they cannot be claimed together.
- Missing the 9-month expansion. From September 2025 funded 30 hours start at 9 months for eligible working parents.
- Falling off the £100,000 cliff. Crossing £100k income removes funded hours and TFC entirely, model pension contributions to stay under.
- Forgetting to reconfirm eligibility. You must reconfirm TFC and funded-hours eligibility every three months or risk losing it.