Letter to Chancellor on Tax-Free Childcare Cap

• Alt text

  Adrian Ramsay MP co-signed this cross-party letter initiated by Claire Hanna MP.

  Rt Hon Rachel Reeves MP

  Chancellor of the Exchequer

  HM Treasury

  1 Horse Guards Road

  Westminster

  London

  SW1A 2HQ

  25 November 2025

  Dear Chancellor,

  We are writing to you as Members of Parliament and stakeholders from across England, Northern Ireland,

  Scotland and Wales, alongside Pregnant Then Screwed, the leading charity working to end the motherhood

  penalty, to request urgent action to support families who are struggling with the rising cost of childcare.

  As per previous correspondence earlier this year, we are calling for the cap on Tax-Free Childcare, fixed at

  £2,000 per child per year since the scheme was introduced in 2017, to be uprated in line with inflation.

  Since 2017, prices have risen by approximately 34%, yet the cap has never been adjusted. As a result, the

  real value of the support available to families has been significantly eroded.

  During this period, childcare costs across the UK have increased sharply, placing growing pressure on

  households already struggling to make ends meet. Updating the Tax-Free Childcare cap to reflect inflation

  would be a simple, fair and effective way to ease the financial burden on families.

  It is also important to note that many other benefits and forms of support, including tax credits and

  pensions are uprated each year. We therefore believe it is both reasonable and consistent that the same

  principle should be applied to the Tax-Free Childcare cap.

  The forthcoming Budget provides an opportunity to address this. Increasing the cap would offer vital

  support to parents and would strengthen the economy by enabling more parents to enter, remain in or

  return to the workforce.

  We look forward to your response.