Childcare costs in the UK

What childcare actually costs

Two different numbers get called "the cost of childcare" in the UK, and they are not the same thing. One is the fee a provider charges. The other is what a family hands over after funded hours and subsidies are applied. Government publishes both, and they now diverge sharply.

The Department for Education's provider survey, with fieldwork carried out between May and July 2025, put the mean hourly fee charged to parents in England at:

• £7.18 an hour for children under 2
• £7.09 an hour for children aged 2
• £6.78 an hour for children aged 3 and 4

Region matters more than age. In London the mean hourly fee for a 2-year-old was £8.92, over 45% higher than the £6.14 mean in Yorkshire and The Humber. Within any one region, fees for different age groups varied by no more than about 77p an hour.

The out-of-pocket picture looks very different. The DfE's 2025 survey of parents found that among children aged 0 to 2 who received paid formal childcare, the median weekly amount actually paid to providers was £75, down from £108 in 2024. For children aged 0 to 4 the median was £47.57, down from £60. That fall coincided with the rollout of the new entitlements, not with providers cutting prices.

Free Childcare for Working Parents

In England, eligible working parents can get 30 hours of free childcare a week for 38 weeks a year, for children aged 9 months to 4 years. Some providers will stretch the same total across more weeks at fewer hours a week; ask, because not all do.

You can apply from when your child is 23 weeks old, and there are deadlines tied to term start dates, so applying the week you need the place is usually too late. If approved you get an 11-digit code to hand to your provider.

The earnings test

You and your partner must each expect to earn at least a set minimum over the three months after you apply. GOV.UK sets these at the National Minimum or Living Wage for 16 hours a week:

• 21 and over: £2,643.68 over three months, or £203.36 a week
• 18 to 20: £2,256.80 over three months, or £173.60 a week
• Under 18 or an apprentice: £1,664 over three months, or £128 a week

Those figures follow the National Living Wage of £12.71 an hour from April 2026, and move every April. There is a ceiling as well as a floor: you are not eligible if you or your partner expects an adjusted net income over £100,000 in the current tax year. That is a cliff edge, not a taper, and it catches people whose bonus tips them over.

You can still qualify while on maternity, paternity, shared parental or adoption leave, on sick or annual leave, or receiving Statutory Neonatal Care Pay. If one parent is not working, the household can still qualify where the other works and the non-working parent gets Carer's Allowance, Incapacity Benefit, contribution-based ESA or certain Universal Credit elements.

If you get extra support

A separate 15-hour entitlement exists for 2-year-olds in families getting extra support, which can be combined with 15 hours from the working parents scheme to reach 30. You count as getting extra support if your household income on Universal Credit is £15,400 a year or less after tax excluding benefits, or if your child has an Education, Health and Care plan, gets Disability Living Allowance, or has left care under an adoption, special guardianship or child arrangements order. That route is applied for through your local council, not online.

Tax-Free Childcare and Universal Credit

Tax-Free Childcare tops up a childcare account: for every £8 you pay in, the government adds £2. The cap is £500 every three months for each child, up to £2,000 a year, rising to £1,000 a quarter and £4,000 a year if your child is disabled. It runs until the September after your child turns 11, or 16 if disabled. You must sign in every three months to reconfirm, and it stops if you do not.

Universal Credit childcare can reimburse up to 85% of costs instead. You cannot hold Tax-Free Childcare and Universal Credit childcare at the same time, so the arithmetic is worth doing before you choose. You can, however, use the funded hours alongside either.

The costs nobody warns you about

Funded hours are free at the point of use, but providers are allowed to charge for meals, nappies, trips and any hours beyond the entitlement. If you do not want to pay for extras, the provider should agree an alternative, such as you supplying food or nappies. You keep the free hours either way. If a provider insists on compulsory extras and refuses an alternative, raise it with your local council.

Only approved childcare counts: a registered childminder, nanny, nursery, playscheme or club, a childminder or nanny with a registered agency, a registered school, or for Tax-Free Childcare a home care worker with a registered agency. A grandparent only counts if they are a registered childminder caring for your child outside your home, and never for the funded hours.

Where to get help

GOV.UK is the governing authority for childcare support in England, and the childcare account there handles both Tax-Free Childcare and the funded hours in one application. Scotland, Wales and Northern Ireland run their own schemes with different hours and ages, so an English figure will mislead you outside England. Your local council's Family Information Service is the right first call for the extra-support entitlements and for disputes about compulsory charges.