From September 2025, many working parents will be eligible for up to 30 hours of funded childcare per week, starting from the term after their child is just 9 months old.
It’s a huge support but it’s not guaranteed.
To qualify, both parents must:
- Earn at least £9,518/year (equivalent to 16 hours a week on minimum wage)
- But not exceed £100,000 in net adjusted income
That £100k limit is where things often get tricky especially for high earners with bonuses, RSUs, or variable income.
Net adjusted income: what actually counts?
Net Adjusted Income is your:
- Total gross income (salary, bonuses, dividends, cash interest, RSUs, rental income…)
- Plus any benefits in kind
- Minus gross pension contributions
- Minus Gift Aid and other qualifying salary sacrifice deductions
Two households earning the same on paper might qualify differently based on how that income is structured.
The Trade-Off: salary today vs funded hours & pension growth
If you’re earning just over the threshold, you might be asking:
“Is it worth putting more into my pension just to qualify for funded childcare?”
For many families, the answer is yes.
Pension contributions can reduce your net adjusted income and offer tax-efficient long-term growth.
When combined with funded childcare (which can save c.£9500+ per year including tax free childcare), this can be a meaningful shift.
But it’s personal, the right answer depends on your income mix, family needs, and long-term plans.
Bonus-Based Income? Plan ahead
If your income includes bonuses, dividends or RSUs:
- Track your gross income and pension contributions through the year
- Don’t wait until March, a late bonus could tip you over the £100k limit
- Consider a pre-bonus pension top-up to stay eligible
Should you rework your setup?
It’s worth a second look if you’re:
- Earning close to (or over) the £100k threshold
- Unsure what actually “counts” toward your income
- Wondering if your current nursery setup is truly sustainable
Small adjustments can make a big difference.
Want to see the numbers for your family?
I offer a Childcare Finance Strategy Session to help you:
- Understand how net adjusted income applies to your household
- Explore smart ways to stay under the threshold (if that’s right for you)
- Weigh the trade-offs between take-home pay, pension contributions and childcare support
- Walk away with clarity and the confidence to make the right next move
“I honestly can’t thank you enough for helping me work through the numbers. The anxiety was just building, and now I feel so much lighter at the end of this session.” — Recent Client
This isn’t about financial products or regulated advice.
It’s strategic financial guidance so you can make an informed, intentional decision that suits your family.
As a mum of two nursery-age children, I’ve worked through these decisions personally and helped many other parents do the same.
🗓️ Sessions are available Mondays, Thursdays and Fridays, with a 2-day pre-work window to ensure we make the most of our time together.
If you’re navigating nursery costs, bonus season, or just want peace of mind that you’re making the right choice:
👉 Book your Childcare Finance Strategy Session — and make a decision that feels clear and right for your life.