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The UK education secretary has said the government is reviewing the income thresholds under which parents are eligible for funded childcare as the government’s spending on early years entitlement reaches £9bn a year.
Bridget Phillipson said “every element” of the childcare system was under review to ensure “we’re getting the best possible outcomes from the money that’s being invested”.
In an interview with the FT, Phillipson said, “We are going to continue to look at eligibility through the childcare review that we’re undertaking, and it does need to be simpler for parents.”
Under current rules in England, a child must have at least one parent earning the equivalent of 16 hours a week at minimum wage to qualify for the extended 30-hour entitlement. At the higher end, neither parent’s adjusted net income can exceed £100,000 a year.
From September 2025, eligible working families were able to access 30 hours of funded childcare from the term after their child turns nine months old until they start school.
The offering has been billed as a way to boost the economy and “transform” women’s lives by making childcare more affordable and allowing more parents to return to work earlier after having a child.
However, the thresholds have not changed since the policy was introduced by the last Conservative government in 2017. For higher earners with an income above £100,000, even a modest pay rise can leave them substantially worse off.
Meanwhile, children whose parents earn below the minimum working threshold may be unable to access the extended 30‑hour entitlement, potentially limiting their early years learning.
Asked if the government was reviewing whether to reduce the cap or lower the threshold to qualify for the funded hours, Phillipson said: “I do want to keep under review every element of the childcare system . . . between now and the next general election.”
Speaking at a primary school in London, which has its own school-based nursery, she said: “There are many quirks that exist, that have developed over the course of the last decade or so as different elements of childcare support have been added into the system.”
Phillipson added: “It does make sense to make that more coherent, more straightforward, both for the sector but also for parents too, and to make sure that we’re getting the best possible outcomes from the money that’s being invested and . . . as of next year, it’ll be £9bn a year that we’re spending on the early years entitlements.”
Government officials stressed that any changes to the thresholds were not imminent and would form part of a wider review of childcare services.
The government has pledged to create 100,000 additional childcare places and more than 3,000 new nurseries, many of which will be based within primary schools, as part of its early years and childcare plan.
It recently announced that it was overhauling its £400mn programme to focus on England’s most deprived areas, after new data revealed the majority of childcare is provided in areas where children are least likely to be ‘school ready’ — a measure of development that includes being able to count, sit still and share with others.
Sir Keir Starmer’s government has pledged that by the end of this parliament, 75 per cent of five-year-olds in England will be “school ready”.
Just over 68 per cent of children are currently deemed to have reached these standards when starting reception, while the latest data from the Department for Education shows only four out of 152 local authorities are currently meeting this target.
In her own constituency of Houghton and Sunderland South, Phillipson said she had been told by one school that of the 28 children who started reception in September, nine were still wearing nappies when they arrived.
“That couldn’t be accounted for on the basis of health need,” she said. “They were children that should have been able to use the toilet independently.”
Phillipson said the government was doing more work to ensure that “schools are supporting their parents about what they need to do together” to improve children’s levels of development.