Overview

• Once one partner’s adjusted net income exceeds £100,000, families lose eligibility for tax-free childcare, 30 funded hours for nine‑month‑ to three‑year‑olds, and half of the funded hours for three‑ and four‑year‑olds.
• Child benefit is withdrawn once an individual’s income reaches £80,000, adding to the losses for affected households.
• AJ Bell’s example shows a move from £99,000 to £101,000 can leave a family about £27,880 worse off through higher tax, reduced personal allowance and the loss of childcare support.
• The firm estimates pay would need to rise to around £156,000 before a family regains the same disposable income and support as before crossing the threshold.
• Pension contributions can reduce adjusted net income to restore support, with an £800 payment lowering it by £1,000 and potentially reclaiming more than £27,000 as the September funded-hours expansion begins.