Tax-Free Childcare and 30 Hours Funding: How Balham Families Can Use Both

Parents often ask us about childcare costs during visits, and one of the most common things I hear is: "I knew about the funded hours, but I didn't realise I could use Tax-Free Childcare on top." It comes up again and again. So I wanted to write something clear and practical for families in Balham and the surrounding areas of Tooting, Clapham South and Streatham who are trying to make sense of the options.

The short answer is: yes, you can use both. And for many working families, using them together makes a meaningful difference.

What the funded hours actually cover

Every three and four year old in England is entitled to 15 hours of free childcare per week, regardless of whether parents work or what they earn. There are no conditions attached to this.

Separately, eligible working families can access up to 30 hours per week. Since September 2025, this extended entitlement is available from 9 months old, not just for three and four year olds. To qualify, each parent (or the sole parent in a single-parent household) needs to be earning the equivalent of at least 16 hours a week at the National Minimum or Living Wage on average. Neither parent can individually have an adjusted net income above £100,000.

Here at Little Starlings we accept both 15 and 30 hours government funding, and we're happy to talk through how those hours can work within your child's sessions.

What funded hours don't always cover is the full picture. If your child attends more hours than the entitlement, or if there are additional costs such as meals, consumables or extra sessions, you'll have a balance to pay. This is where Tax-Free Childcare comes in.

How Tax-Free Childcare works

Tax-Free Childcare is a government scheme that gives you a 20% top-up on money you put towards childcare costs. For every £8 you pay into your Tax-Free Childcare account, the government adds £2. The top-up is worth up to £500 every three months, which means up to £2,000 per year per child. If your child is disabled, this rises to £1,000 every three months, up to £4,000 a year.

Children must be 11 or younger to be eligible (or 16 or younger if disabled).

One important practical point: your childcare provider must be registered to accept Tax-Free Childcare payments before you can use the scheme with them. I'd always encourage parents to check this early on rather than assuming.

How tax-free childcare and 30 hours work together

This is the part many families miss. The two schemes are not either/or. You can receive your funded hours entitlement and use a Tax-Free Childcare account to pay for anything beyond it, whether that's additional sessions, or costs that sit outside the funded entitlement.

The application process is simpler than most parents expect. There is a single application that covers both funded hours and Tax-Free Childcare. When you apply, the system tells you which schemes you're eligible for. You can check your eligibility and apply through Childcare Choices.

One thing worth knowing: you cannot use Tax-Free Childcare and Universal Credit childcare support at the same time. If you're receiving Universal Credit, you'll need to decide which route works better for your family.

Also, remember to sign in to your Tax-Free Childcare account every three months to confirm you're still eligible. It's easy to forget, and missing this can pause your top-up.

A practical example of how this might look

Imagine your child attends more hours than your funded entitlement covers. The funded hours take care of the entitlement portion. For the remaining sessions, you pay into your Tax-Free Childcare account and the government tops it up automatically. Over a year, that top-up can add up to something significant.

For families across Wandsworth, where childcare costs in London tend to be higher than the national average, this combination can make a real difference to what you actually pay each month.

A note on earnings and eligibility

The minimum earnings threshold for the 30 hours entitlement is tied to the National Minimum and Living Wage, which changes each April, so I won't quote a specific figure here. The best thing to do is check your own situation directly through Childcare Choices, which will give you an accurate answer based on current rates.

If you're unsure how your funded hours translate into sessions at Little Starlings, our fees and funding page has more detail, and we're always happy to talk it through.

For a broader overview of how funding works in this area, our guide to free early years funding in Wandsworth covers the key details in one place.

Come and see us

If you'd like to understand how funded hours and Tax-Free Childcare could work within your child's place at Little Starlings Nursery Balham, the easiest first step is to come and have a look around. You'll get to meet the team, see the space and the garden, and ask any questions you have in person. It's always a much more useful conversation face to face. You can book a show-around instantly online, and we'll take it from there.