Childcare Costs in England: What Parents Need to Know in 2025

For many families, childcare is the biggest monthly expense after the mortgage or rent. In England, the picture has shifted dramatically in the last year — government-funded entitlements have expanded significantly, and for eligible working parents, the cost of care for children under three has roughly halved compared to 2024.

But the system is complex, the savings are not universal, and fees for children who don't qualify for the expanded entitlements have actually risen. This guide explains what childcare really costs in England in 2025, what support you're entitled to, and how to find the best value registered provider.

Use our free childcare cost calculator to get a personalised estimate based on your child's age and location.

How Much Does Childcare Cost in England?

The headline number from Coram Family and Childcare's 2025 Childcare Survey — the definitive annual snapshot of UK childcare costs — tells a striking story. For eligible working parents:

A part-time nursery place for a child under two now costs an average of £70.51 per week — down 56% on 2024
A full-time place for a child under two averages £238.95 per week — down 22% on 2024

These reductions are almost entirely the result of the new funded entitlements for working parents of children from 9 months old, introduced in stages from April 2024. For families who don't qualify, costs have actually risen — by around £105 per week for a part-time place for an under-2.

In monthly terms, for full-time care (around 50 hours per week), approximate costs look like this:

Under 2s: Around £1,789/month (or significantly less if you qualify for the new entitlement — see below)
2-year-olds: Approximately £1,599/month
3–4 year olds: Around £1,447/month, though qualifying working parents can reduce this substantially through their funded hours

Hourly nursery rates in England average around £6.15, though this varies hugely by region. London is consistently the most expensive, with some inner-London settings charging £10–£12/hour or more. Northern cities and rural areas tend to be cheaper, sometimes by 30–40%.

Childminders are typically 15–20% cheaper than nurseries and offer a more flexible, home-based alternative — particularly worth considering for babies and younger toddlers.

Want to know your actual costs? Use our childcare cost calculator — just enter your child's age and postcode to get a real-world estimate.

The Expanded Funded Entitlements: What's Changed

This is the part that's genuinely transformed the picture for many English families — but it's also the part that causes the most confusion.

Here's where things stand in 2025, as confirmed by the Department for Education:

All 3 and 4-year-olds are entitled to 15 universal hours per week of funded care (38 weeks/year). This has been in place for years and is unchanged.

Working parents of 3 and 4-year-olds can access an additional 15 hours (30 hours total), if both parents work at least 16 hours per week at National Living Wage and neither earns over £100,000 per year. Also unchanged.

The new entitlements (phased from 2024):

From April 2024: Eligible working parents of 2-year-olds can access 15 hours/week of funded childcare (38 weeks/year)
From September 2024: Eligible working parents of children aged 9 months to 2 years can access 15 hours/week
From September 2025: This extends to 30 hours/week for eligible working parents of children aged 9 months up to school age

To qualify for these new entitlements, both parents (or the sole parent in a single-parent household) must expect to earn at least the equivalent of 16 hours per week at National Living Wage, and neither can earn more than £100,000 adjusted net income per year.

It's important to note that nurseries cannot charge top-up fees for the funded hours themselves, but they can — and many do — charge separately for meals, nappies and optional activities. Always ask for a full cost breakdown.

The House of Commons Library notes that by 2025/26, the government is spending approximately £1.8 billion supporting the childcare expansion — the largest investment in childcare in English history.

How Costs Vary by Region

England's childcare market is highly regional. The gap between the cheapest and most expensive areas is large enough to affect family finances meaningfully.

London is the most expensive region by some distance. Inner London parents regularly pay £80–£95 per day for full-time care, and even with 15 or 30 funded hours, top-up costs can remain substantial. The IFS has noted that private market hourly rates in areas like Kensington and Chelsea can reach nearly £12/hour — more than double the national average.

The South East and East of England are also above average, reflecting high living costs and strong labour market demand.

The North West, North East, Yorkshire and the Midlands tend to be closer to or below the national average. The IFS found that the cheapest areas in England — places like Wigan and Rotherham — have market rates around £4.80/hour for 2-year-olds, compared to nearly £12 in parts of London.

Rural areas are often cheaper on a per-hour basis, but availability of registered providers can be more limited, and access to funded hours more difficult to arrange in practice.

Our search tool lets you filter by location to compare real providers and real prices in your area.

What Drives the Cost of Childcare?

Understanding why childcare costs what it does helps you make smarter comparisons.

Type of provider. Nurseries have higher fixed costs — rent, rates, multiple staff, dedicated buildings. Childminders work from home with smaller groups of children, which typically translates to 15–20% lower hourly rates. They're regulated by Ofsted, can deliver funded hours, and for many families — especially with babies — a home-based environment suits the child very well.

Staff ratios and qualifications. For under-2s, the legal staff-to-child ratio is 1:3 in England — one member of staff for every three babies or young toddlers. This is the single biggest reason infant care is so much more expensive than care for older children. For 2-year-olds, the ratio is 1:4 (or 1:5 in settings that choose to apply the less restrictive ratio); for 3 and 4-year-olds, 1:8. Settings where staff hold higher qualifications often charge more — and the DfE's provider quality data shows that qualifications are strongly linked to outcomes for children.

What's included in the fee. This is the detail that catches most parents out. Many nurseries charge separately for meals and snacks, nappies, trips and specialist activities. When comparing two nurseries at similar headline rates, the all-in cost can differ by £30–£50 per week once extras are factored in. Always ask for a written breakdown.

Provider size and ownership. Large nursery chains have economies of scale but less flexibility. Smaller independents and community nurseries sometimes offer lower rates, more flexible hours, or a more personal approach. Neither is inherently better — it's worth looking at the Ofsted inspection report for any setting you're considering.

How to Reduce Your Childcare Costs

Even without the funded entitlements, there are meaningful ways to reduce what you pay.

Claim Your Funded Hours

This sounds obvious, but the DfE estimates that nearly one in five eligible children may not be claiming their funded entitlement. If your child is 3 or 4, they are entitled to at least 15 free hours per week — and if you're a working parent, potentially 30 hours. If your child is under 3 and you're working, check whether you qualify for the new entitlements introduced from April 2024.

Apply for funded hours through Childcare Choices. For the 30-hour offer, you'll receive an eligibility code to give to your provider.

Tax-Free Childcare

Tax-Free Childcare (TFC) is available for any childcare hours you pay for privately — it works alongside your funded entitlement, not instead of it.

For every £8 you pay into your online childcare account, the government adds £2, up to a maximum top-up of £500 per quarter (£2,000 per year) per child. For disabled children, the limit is £1,000 per quarter.

The eligibility criteria mirror the 30-hour entitlement: both parents must be working and earning between the equivalent of 16 hours at National Living Wage and £100,000 per year.

Despite being a useful scheme, take-up has historically been low. A 2022 parliamentary answer cited a 42% take-up rate among eligible English families. If you're paying for any private hours, it's worth setting up an account. Apply at GOV.UK.

Universal Credit Childcare Element

If you're on Universal Credit, you may be able to reclaim up to 85% of eligible childcare costs, with a monthly cap of £1,014.63 for one child or £1,739.37 for two or more. This can be used for privately paid hours not covered by funded entitlements.

Childminders

If cost is the primary consideration, a registered childminder is usually the most affordable option for full-time care — typically 15–20% cheaper per hour than a nursery. They're Ofsted-regulated, can deliver funded hours, and many offer more flexible start and finish times than fixed nursery sessions.

Nanny Shares

If you have a very young baby and live near another family with a similar-aged child, a nanny share can work out cost-effectively. You each pay a portion of the nanny's salary, and both children benefit from home-based, one-to-one-style care. It requires coordination, but it's worth considering for the under-1 stage before funded entitlements kick in.

Sibling Discounts

Many nurseries offer a 5–15% discount for a second child attending the same setting. Some also operate referral schemes. These discounts aren't always advertised — ask directly when you're enquiring.

What Should Be Included in Your Childcare Fee?

Before you sign any agreement, get a clear written list of what's included and what you'll be charged separately for. Here's what to check:

Meals and snacks — included at many nurseries, but not all
Nappies and wipes — more common in baby rooms; often supplied by parents in toddler rooms
Formula milk — almost always supplied by parents
Activities and trips — these are almost always charged on top and, under DfE rules, cannot be made a condition of accessing funded hours
Settling-in sessions — some settings charge for these; others offer them free
Bank holiday cover — most nurseries close on bank holidays but still charge a retainer; check the terms carefully

Key questions to ask before you sign up:

What's included in the weekly fee, and what's charged separately?
Do you accept funded hours? Are there any additional charges linked to the funded place?
What's the notice period if I need to change hours or leave?
Is there a registration or deposit fee?
What is your Ofsted rating, and when was your last inspection?

Finding Affordable Childcare in England

The childcare market is large and competitive in most English cities. Shopping around pays off.

Compare multiple providers. Search registered nurseries and childminders in your area on ChildcareHub. You can filter by age range, type of setting, Ofsted rating, and location. Fees and availability change regularly, so even if a setting was full when you last looked, it's worth contacting them again.

Check the Ofsted report. All registered childcare providers in England are inspected by Ofsted, and reports are published online. A 'Good' or 'Outstanding' rating tells you something meaningful about quality — though inspection grades are a snapshot in time, and some excellent settings sit below an outstanding grade.

Think about flexibility. If you work shifts or non-standard hours, not all nurseries will be able to accommodate you. Childminders and some specialist nurseries are more flexible. Filter by session times on ChildcareHub to find providers that match your working pattern.

Start earlier than you think you need to. For popular nurseries in cities, waiting lists for baby rooms can be 12–18 months. Many parents add their name to a list before their child is even born.

Ask about the September 2025 changes. From September 2025, eligible working parents of children from 9 months can access 30 funded hours per week. If your child will be under 3 at that point, ask any prospective provider how they're planning to accommodate the expanded entitlement — not all settings have the capacity, and it's worth knowing before you commit.

The Bottom Line

England's childcare system is in a period of genuine transformation. The expansion of funded hours for working parents of under-3s has meaningfully reduced costs for hundreds of thousands of families — and the September 2025 expansion to 30 hours will go further still. But the system still has significant gaps: families who don't meet the eligibility criteria face rising costs, availability for children with SEND remains poor in many areas, and the long-term financial sustainability of the sector is uncertain.

For most families, the practical priorities are: claim everything you're entitled to, compare providers carefully, and don't assume the cheapest option is the worst or the most expensive is the best.

Use our childcare cost calculator to see what you'd pay — and search providers in your area to start comparing today.

Sources: Coram Family and Childcare, Childcare Survey 2025; House of Commons Library, Early Years Funding in England, 2025; GOV.UK, Early Years Funding Rates 2025–2026; Institute for Fiscal Studies, What you need to know about the new childcare entitlements; DfE Education Hub, Free Childcare 2024.