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£100k tax trap and childcare cliff fixer

Repo-linked (EBLR): your rate rises by the same 0.25% at the next reset date, unless your lender holds back some of it. Resets happen at least once every three months, so expect the change within about three months of 7 October.
MCLR-linked: your lender's own cost of funds drives the rate and it resets on its own date, often every six or twelve months. The effect arrives later and may be smaller. Our guide to [[blog:eblr-vs-mclr-home-loan|EBLR and MCLR]] explains the difference.
Fixed rate: nothing changes until the fixed period ends.

Between £100,000 and £125,140 you lose £1 of tax-free pay for every £2, so the real rate is 60%. At £100,000 you also lose Tax-Free Childcare and 30 free hours. See how much to put in a pension to get back under.

2026/27, England. Adjusted net income is income minus gross pension and Gift Aid. £100,000 is the childcare and Personal Allowance line. Check HMRC and your pension rules before paying in. Estimate.

Common questions

Why is the effective rate 60% between £100k and £125,140?

You lose £1 of Personal Allowance for every £2 over £100,000, on top of 40% tax.

Do both parents need to be under £100k?

Yes. Tax-Free Childcare and 30 hours are lost if either parent is over £100,000.