Increase the £100k childcare income cap in line with inflation

Background

Increase the £100,000 per-parent childcare eligibility income cap to restore its original real-terms value, and automatically uprate it each year in line with inflation to prevent further fiscal drag and unfair loss of childcare support.

Additional details

The £100,000 cap has been frozen since the 30-hours childcare scheme began in 2017. Since then, CPI inflation has risen by around 35%, meaning £100,000 now has the real-terms value of roughly £135,000. Earnings have increased while the cap has not, pulling more families over the limit each year. The per-parent cliff edge also produces unfair outcomes between households with similar or lower total incomes.

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