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The support listed in this briefing applies to England only unless otherwise stated.

What is the cost of childcare in England?

Average hourly fees can be found in the analysis of the Department for Education’s 2021 Survey of Childcare and Early Years Providers. It found in 2021, the mean hourly fee charged to parents (PDF) was £5.53 for both children under the age of two and aged two, and £5.39 for three- and four-year-old preschool children.

The 2022 Family and Childcare Survey by children’s charity, Coram, found the cost of a part time nursery place (25 hours) for three to four year olds using the free entitlement had increased by 3.5% since 2021. Since the first such survey in 2001, reported childcare costs have increased steadily.

Data from the Organisation for Economic Co-operation and Development (OECD) has found parents in the UK face some of the highest childcare costs as a percentage of average wages, compared to other countries.

For many households, childcare can be amongst the biggest bills and so can be an important factor in the context of pressures on the cost of living. A survey by the campaign group ‘Pregnant then Screwed’ found almost all (99%) parents of young children said the cost of childcare was “making the cost of living crisis even more challenging”. Higher energy bills have led to some early years providers “having to look at” increasing overall fees and the cost of facilities.

Some organisations have suggested the free entitlement should be extended. In its 2022 Childcare Survey, Coram recommended the 30 hours free childcare should be available to all three- and four-year-olds.

What financial help is available for parents?

In England, all three and four-year-olds, and elgible two-year olds are entitled to what is commonly called “15 hours of free childcare”. Additionally, some three and four-year-olds qualify for a further 570 hours of funded childcare on top of the universal 15 hours.

Parents can also apply for support through the Government’s Tax Free Childcare (TFC) scheme, where a parent or carer pays funds for childcare into a TFC account. The Government tops up each £8 paid in with an extra £2, up to £500 per child every three months, or £1,000 every three months for a disabled child. Money in the TFC account can then be used to pay for approved childcare.

Working families can also get help with childcare costs through the childcare element of Working Tax Credit and the childcare disregard in Housing Benefit. Tax credits and “legacy” social security benefits, including Housing Benefit, are being replaced by Universal Credit (UC). UC also includes a childcare costs element, which reimburses claimants for childcare charges already paid. Help with upfront childcare costs can also be provided from the Flexible Support Fund, or Budgeting Advances.

Is help available for students?

Higher education

Undergraduate students, and students pursuing an Initial Teacher Training course or Postgraduate Certificate in Education (PGCE), may be eligible for help with their childcare costs. If they meet the required conditions, they can access help through the Childcare Grant (additional income-assessed funding) and the Parents’ Learning Allowance (additional funding as part of the student finance package for everyday costs of study, such as books, study materials, and travel).

Higher education providers also have hardship funds which are available to help students in financial difficulty.

Additionally, medical, dentistry and healthcare students and postgraduate students in receipt of a Social Work Bursary may be eligible for help with childcare costs.

Further education

For further education students aged 20 or older, help is provided through Learner Support funds, which are administered by individual providers.  

Students under 20 years of age at the start of a publicly funded further education course with children may be eligible for weekly payments through the Care to Learn scheme.

What help is available in the devolved nations?

This note applies to England only. However, for information on the help available in each of the devolved nations see the following government sites:

Alternatively, the Government’s Childcare Choices website has further information.

Help with childcare costs for parents studying across the UK can be found in the Library’s constituency casework article on childcare support for students.

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