Parents making childcare decisions face important questions about costs and support. Recent government updates have widened access to funded hours, but understanding exactly what this means for families is essential. This article breaks down the latest changes, highlights who can benefit, and provides clear information on how nursery funding can help reduce childcare expenses while supporting children’s early development.
What Has Changed in Nursery Funding
Recent government policy has extended free childcare entitlements for younger children in working families. As of April 2024, two-year-olds whose parents meet work criteria gained access to 15 funded hours per week for 38 weeks of the year. Starting September 2024, that entitlement was expanded to include children aged 9 months to 2 years in eligible working households.
From September 2025, eligible children 9 months up to school will receive 30 hours per week of funded childcare. This will apply to families where parents (or a single parent in single-parent households) meet work status and earning threshold criteria.
How Many Parents Are Using Funded Childcare
Data shows that uptake is high among 3- and 4-year-olds. In 2025, about 91% of eligible 3- and 4-year-olds were registered for the working parent entitlement, often called the “30-hour” offer. For younger children, among those eligible aged 9 months to 2 years, about 73% were registered for the expanded entitlement in a recent spring term. This suggests that many families benefit, but some eligible ones do not yet have access to what is available.
Who Qualifies for Nursery Funding
A few key factors that parents need to understand clearly shape eligibility for nursery funding. The first is the age of the child. While the universal entitlement of 15 funded hours a week applies to all 3- and 4-year-olds regardless of family income or work status, the newer entitlements extend this support to younger children. From April 2024, many two-year-olds in working households became eligible, and from September 2024, the age range widened again to include children as young as nine months. By September 2025, all eligible working families with children from nine months until school age can access up to 30 hours per week.
Work status is another decisive factor. To qualify for the extended entitlement, parents usually need to be working at least the equivalent of 16 hours per week at the national minimum or living wage. This includes self-employed parents, though seasonal or irregular work patterns can sometimes complicate eligibility. The rules are designed to support families in work but also account for situations such as parental leave or disability, which may alter the requirement.
Income thresholds are also part of the criteria. While families must earn above a minimum level, there is also an upper cap. For example, parents earning above a set annual income figure may not be eligible for the additional funded hours, even if their child qualifies by age. These limits ensure that funding is directed at families who need it most while still supporting a wide range of working households.
The application process is essential. Parents must apply for a funding code through the government’s childcare service, confirm their details, and supply the necessary evidence to show they meet the criteria. This code then needs to be provided to the childcare provider. Renewal is not automatic, and parents typically need to reconfirm their eligibility each term to continue receiving the hours. Missing deadlines or failing to update details can mean losing access, so staying organised is crucial.
Eligibility varies slightly by local authority, so checking your council’s website is essential.
What Funding Covers and What It Does Not
Many assume “free childcare” means no cost at all. That is not always the case. Funded hours cover core childcare provision but often exclude extras such as meals, nappies, supplies, outings or late-pickup charges. Nurseries vary in which extras they charge for and how they structure the funded vs non-funded time.
Also, the way hours are scheduled can affect your total cost. For example, some parents “stretch” their hours over more weeks of the year, reducing weekly hours but filling more weeks. Other settings provide the full hours only during term time. If you need wrap-around care or holiday provision, these are usually extra.
How Costs and Funding Rates Are Evolving
The government has increased the funding rates for local authorities for different age groups. For instance, the rate for three- and four-year-olds rose by about 4.6% for 2024-25. Two-year-olds also saw an increase, though in real terms, many nursery wage costs rose faster.
In addition, average rates for younger children (under twos) are currently higher because staffing ratios are stricter. That means nurseries need more staff per child, which increases overhead. These cost pressures can lead some providers to charge supplemental fees for extras or operate minimum session times.
How to Use Nursery Fundings Wisely
Here are practical steps parents can take to maximise benefit and avoid unexpected costs:
- Check with your nursery/provider about what is included in the funded hours and what extras cost. Ask for a written schedule of charges.
- Apply for funding early; sometimes codes must be submitted well before the term begins.
- Understand how your hours will be scheduled: full days, half days, stretched over more weeks, term-time only, or year-round. Choose the model that best fits your work pattern.
- Keep all documentation, including proof of work status, income, and the child’s age, and reconfirm eligibility each term or year.
- Explore additional schemes: Sometimes nursery funding is combined with tax-free Makedcare or other support. Make sure you understand all the tools available.
Balancing Funding and Quality
While funding is a central concern, quality matters greatly. High staff-to-child ratios, well-qualified staff, a safe and clean environment, learning resources and clear communication are all factors that affect child well-being and early development.
Parents should read reviews, visit settings, ask how the nursery plans learning, safety policies, meals and how well they manage transitions (such as settling in or moving rooms). Sometimes paying slightly more for higher quality in your chosen contracted hours gives better value over time than minimal cost but low standards.
Summary
Nursery funding changes in the UK have extended free hours to younger children in working families, and increased the number of parents using the support. Knowing whether you qualify, what is included, and how providers charge is key. By being informed, applying early, and selecting settings that combine good quality with clear charging, you can make nursery funding work well for your family.
If you need help comparing nurseries near you or understanding how funded hours apply in your local area, I’m happy to provide examples or resources.