Parents to save thousands in childcare cost with new funding
First phase of the biggest ever expansion of childcare starts giving working parents of 2-year-olds access to 15 hours a week.
Thousands of parents of 2-year-olds across the country are getting help with their childcare costs as the first phase of the biggest ever expansion in childcare starts.
In this first stage, working parents of 2-year-olds are now able to access 15 hours a week of government-funded childcare from 1 April.
The rollout of support is part of the government’s plan to help families – freeing thousands of couples from having to choose between having a family and a career, as over 150,000 children are on track to secure government-funded places from this week.
By September 2025 the full rollout will be completed, with working parents able to access 30 hours from the end of maternity leave to when their child starts school, saving parents an average of £6,900 per year.
The government has supported the sector to deliver this expansion by increasing the number of staff and places, introducing measures to boost the recruitment and retention of childminders, launching a major national recruitment campaign and providing over £400 million of additional investment to uplift funding rates in 2024 to 2025. On top of this, the government will increase rates over the next 2 years by an estimated £500 million, the Chancellor confirmed at the Spring Budget.
The government is confident that the childcare sector is ready to deliver the offer and make sure parents have the childcare they need. The government is paying a higher rate per place than parents would pay at the market rate for the new entitlements – as independently reported by the Institute for Fiscal Studies.
Prime Minister Rishi Sunak said:
Last year we promised the biggest ever expansion in childcare provision this country has ever seen, and today we are delivering on our plan with 15 hours of free childcare for parents with 2-year-olds.
We want to give working families the peace of mind that they will be supported and our full expansion will save parents £6,900 a year – helping to build a brighter future for families and help to grow our economy.
Education Secretary Gillian Keegan said:
This is a landmark moment, and I am extremely proud to see we’re on track for more than 150,000 children to take up government-funded places under our new offer. This will be a lifeline for working parents, building up to this government’s plan for the most comprehensive childcare support in this country’s history by 2025.
Support with childcare costs has an enormous ripple effect, freeing up parents to increase their hours at work and put more money in their pockets, or giving them the security to try out a new career or passion. It also contributes to economic growth and opens up new career opportunities in a hugely rewarding sector.
The largest ever expansion in childcare is just one part of the government’s long-term plan to give working families a brighter future. Businesses across the country have welcomed the historic expansion which will support them to grow.
Jane Gratton, Deputy Director Public Policy at the British Chambers of Commerce said:
When parents struggle to find a childcare solution, employers lose talented people from the workplace. That’s damaging for people, business and the economy. The further rollout of free childcare in England is good news. It will benefit parents and employers, as well as providing more great jobs and career opportunities in the childcare sector.
Helping more parents access high quality, affordable childcare will help firms recruit and retain skilled people and remove a significant barrier to work. We need more capacity in the childcare system to help fill jobs in local economies and ensure individuals can progress in their careers.
Helen Dickinson OBE, Chief Executive of the British Retail Consortium, said:
The cost of childcare remains one of the biggest challenges to many parents, preventing many who wish to re-enter the workforce. As the largest private sector employer, we welcome the expansion of childcare provision that is being rolled out, and the support it will offer to many of our colleagues and potential colleagues, now and in the future.
Parents like Jennifer – who has been using 2 of the government childcare support schemes to help her family with the costs of childcare – will benefit. Jennifer is already using tax-free childcare, and will now also start using the 15 hours of government-funded childcare for her 2-year-old.
She said:
If we didn’t have the support, we’d have to reduce our working hours. When I went back to work, I stepped up into a promotion and started working more hours. Having access to this support made it financially sustainable to increase my hours.
Lots of family members and friends will also benefit, and we can see already how it will help people feel less anxious about finances.
Applications for the first stage of the rollout from April are now closed, but parents who have already registered can continue to take up places from April.
The number of parents taking up places is expected to continue to grow by tens of thousands over the coming weeks, and the government is expected to provide a formal update on take-up in the middle of April.
Chris McCandless, CEO, Busy Bees Europe, said:
We welcome the government’s continued commitment to expanding support for early years education. The increase in funded hours will help working families and give more children the best start in life, and we’re really pleased that the rollout has been accompanied by the clarity on future funding rates we needed to invest in creating the additional capacity required in our centres.
We’ve already seen a significant increase in interest in our nursery places in recent months from parents looking to make use of the funded hours, and expect to welcome more children to our nurseries this year and in subsequent years as the scheme expands further.
Jo Turley, Managing Director, Ashbourne Day Nurseries, said:
At Ashbourne Day Nurseries, we welcome the extension of government funding in early years childcare and education as a positive step forward. Quality early years education is foundational in shaping a child’s future, and we eagerly anticipate any benefits this extended funding will bring to families across our nurseries and the broader community.
Justine Roberts, Founder and CEO of Mumsnet, said:
By closing the gap in support between the end of maternity leave and a child’s third birthday, the government will enable many women who would otherwise have been forced out of the workforce to choose to stay in work, benefitting not just them and their families but also the wider economy.
All parents are being encouraged to check their eligibility at https://www.childcarechoices.gov.uk for the September phase of the rollout, and to act now to secure their place for September if they have a preferred provider.
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