Cross £100,000 of adjusted net income by £1 and you lose all free childcare hours and Tax-Free Childcare — on top of the 60% tax zone. How the cliff works, which parent counts, and the pension escape route.
Two punishments start at £100,000 of adjusted net income, and they work differently. The 60% tax zone is a taper: between £100,000 and £125,140 the personal allowance withdraws at £1 per £2, making each pound cost about 60p in tax. The childcare cliff is not a taper: at £100,001, all 30 funded hours for under-3s and all Tax-Free Childcare vanish at once (3–4-year-olds keep only the universal 15 hours). For a household with two nursery-age children the cliff alone can be worth £10,000–£15,000 a year — lost to a single pound.
Eligibility tests each parent separately: a couple on £99,000 each (£198,000 household) keeps everything; a single earner on £101,000 loses it all. The test is adjusted net income — taxable income minus gross pension contributions and Gift Aid — reconfirmed every three months, and a one-off bonus can break a whole year's eligibility. The same £100,000 ANI line also guards the personal allowance, so the two penalties always arrive together.
Because the test is adjusted net income, pension contributions move you back under the line — and near the cliff they are absurdly well paid. A parent on £110,000 with £11,000 of childcare support at stake who contributes £10,000 gross: saves ~£6,000 of tax (the 60% zone), regains the support, and banks £10,000 of pension. The contribution can cost less than nothing this year. Salary sacrifice does the same job and saves NI on top; sacrificing a bonus below the line is the classic January conversation with payroll. The free childcare cliff calculator prices your exact position, and the salary sacrifice calculator adds the NI.
One honest caution: money in a pension is locked until 55 (57 from 2028). For most parents in this zone the trade is excellent anyway — but it's a trade, and childcare bills are paid from current income the pension no longer provides. Hundred Summers models the 60% zone in every projected year, so the contribution's long-term effect lands in your actual plan rather than a one-year snapshot.