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Conservative Party leader Kemi Badenoch has pledged to remove the £100,000 income threshold that currently limits access to some government-funded childcare support in England, arguing that parents should not face losing benefits because their earnings rise above the limit.
Speaking to the BBC ahead of the Conservative Party conference in Birmingham, Badenoch said the policy was intended to remove what the Conservatives describe as a childcare “cliff edge” and strengthen incentives for parents to remain in work.
The proposal would remove the current earnings limit for both government-funded childcare hours and tax-free childcare if the Conservatives return to government.
Since September 2025, eligible working parents in England have been able to receive up to 30 hours of government-funded childcare each week for children aged between nine months and four years.
Under the existing rules, however, a family is not eligible for the full working-parent entitlement if either parent earns more than £100,000 a year. The threshold applies to individual parental income rather than total household earnings.
All three- and four-year-olds remain eligible for 15 hours of funded childcare regardless of household income.
The £100,000 limit also applies to tax-free childcare. Under that scheme, the government adds £2 for every £8 paid into an approved childcare account, up to £2,000 per child each year.
The Conservatives say they would remove the £100,000 threshold from both schemes.
Badenoch presented the proposal as part of a wider Conservative argument that the tax and benefits system should encourage people to work and increase their earnings.
Speaking to the BBC's Laura Kuenssberg, she said people who work harder should not be financially penalised for doing so.
Asked whether someone earning £1m a year could potentially qualify for free childcare under the proposed system, Badenoch said the Conservatives did not want the level of income to determine whether someone was punished for working.
The party argues that the current threshold can create a sharp financial disadvantage for some families when one parent's income rises above £100,000.
Economists have previously highlighted the effect of the threshold, particularly for households with childcare costs, because losing support can outweigh the financial benefit of a substantial pay rise.
The Conservatives estimate that removing the childcare threshold would cost approximately £700m.
The party says the measure would be funded by reducing the number of public servants working in executive non-departmental public bodies, organisations that operate at arm's length from government departments.
The Conservatives estimate that changes to these bodies could save £1.6bn by 2029-30, which they say would provide sufficient funding for the childcare proposal.
The party has described the measure as an early step towards wider changes to the tax system, with shadow chancellor Andrew Griffith expected to discuss incentives to work and invest during his conference speech.
Badenoch's announcement comes as Conservative members gather in Birmingham for the party's annual conference, where the leadership is expected to outline further policies ahead of the next general election.
The Conservatives lost power at the 2024 general election and have faced competition from both Labour and Reform UK in subsequent polling. Badenoch has sought to present the party as different from the Conservative Party that contested the last election.
Ahead of the conference, the Conservatives published a 100-page statement of principles which placed economic growth and the role of business at the centre of its approach.
Badenoch has also reaffirmed Conservative support for the state pension triple lock. Under the policy, pensions rise each year by whichever is highest among inflation, average earnings growth or 2.5%.
She said the Conservatives would retain the triple lock, while criticising what she described as approaches that place pressure on pensioners and vulnerable people.
The childcare proposal is part of a broader Conservative argument about how taxation and government support affect household decisions.
The party says the existing £100,000 threshold can create an unusual situation in which a parent receiving a pay rise may become financially worse off once childcare support is withdrawn.
Conservatives also argue that the threshold is unfair because eligibility is determined by each individual's earnings rather than the combined income of a household.
The proposal would represent a significant change to the current system if implemented. Its ultimate cost, impact on childcare demand and effect on household finances would depend on the final design of the policy and the wider tax and spending decisions of any future government.
For Daily Dazzling Dawn, the announcement marks another significant development in the Conservatives' attempt to define their economic and family policy ahead of the next general election, with childcare costs and work incentives likely to remain important issues for families across England.
