Last year, the former Conservative government announced plans to reform the UK childcare system, making the vast majority of working families eligible for free childcare hours. The rollout of the new policy began in April this year.
Support is now eligible from when your child turns nine months old – and the number of hours you are entitled to is set to double from September next year to 30 hours per week.
The new measures represent a big win for working parents, as well as those who have been kept out of the workplace by astronomical childcare costs. However, the bad news is the policy could be jeopardised by staff shortages and limited nursery places.
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According to projections from the Department for Education, around 70,000 additional places and 35,000 early years educators are still needed to deliver the final phase of the policy next year.
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Keir Starmer’s government has voiced its commitment to the policy, and chancellor Rachel Reeves has said she will confirm steps to protect education and early years priorities as part of her first Budget. Several details have been revealed already – including steps the government is taking to boost the number of nursery places.
We delve into what you’re entitled to and how to apply.
When does the free childcare policy start?
The new childcare support is being rolled out in three phases. The first two are already available, and the third and final stage will go live next year.
- Since April 2024, eligible parents have been entitled to fifteen hours of free childcare per week for two-year-olds.
- From September 2024, this support was extended to children from nine months old.
- From September 2025, the allowance will be doubled to 30 hours per week for all children aged nine months to school age.
It is worth remembering that this provision is available for 38 weeks of the year during school term time, so you will need to make separate childcare arrangements for the holidays.
Who is eligible for free childcare?
The new measures broaden the existing eligibility criteria, making free childcare available to hundreds of thousands more parents.
Previously, parents were only eligible to receive free childcare for two-year-olds if they already received some form of additional government support, such as universal credit. Under the new rules, however, parents are entitled to the support as long as they (and any partner) earn less than £100,000 each.
Once you hit this income threshold, you lose all of your free childcare entitlement for under threes. Meanwhile for high-earning parents of three and four-year-olds, the entitlement drops to 15 hours a week once your salary hits £100,000.
To apply, you and your partner (if you have one) must be in work and earning a minimum of £183 per week. This is equivalent to 16 hours at the National Minimum or Living Wage. The amount is lower for under 21s. Further details can be found at childcarechoices.gov.uk.
How do I apply?
If you meet the eligibility criteria, you can apply now on the government website.
You will need your National Insurance number to hand when you apply, or your Unique Taxpayer Reference if you’re self-employed. The application form will also ask you to provide these on behalf of any partner.
You will also need to provide your child’s UK birth certificate reference number and the date you started (or are due to start) work.
To avoid missing out, you will need to reconfirm your eligibility every three months in case your circumstances have changed.
When should I apply for my 15 hours of free childcare?
You can apply for 15 hours of free childcare form when your child is 23 weeks old. The start of their first term at nursery will depend on when their birthday falls.
- If your child turns nine months old between 1 January and 31 March, they will begin nursery during the school term that starts in April.
- If your child turns nine months old between 1 April and 31 August, they will begin nursery during the school term that starts in September.
- If your child turns nine months old between 1 September and 31 December, they will begin nursery during the school term that starts in January.
You can apply for your free childcare hours one term before your child is due to start nursery, but remember that the waiting lists for popular nurseries can be months long.
In other words, although you can apply for your free hours with relatively little notice, you should plan ahead to ensure you bag a spot with your childcare provider of choice.
How much money will the free childcare policy save me?
The new policy could save working families thousands of pounds each year. According to MoneyHelper, the average cost of sending an under-two to nursery part time is £149 per week (25 hours), or £7,210 per year.
Meanwhile, if you need full-time support, you can expect to pay significantly more. Full-time nursery fees amount to an average £300 per week (50 hours), or £14,030 per year. The costs in inner-city locations like London can come in even higher.
When you add these savings to the additional income parents will earn by returning to the workplace, the impact on a household’s wealth could be considerable. However, Laura Suter, director of personal finance at AJ Bell, points out that there are a few caveats to bear in mind.
She says: “The government pays nurseries a set hourly fee for the funded hours it pays for, and often this is below what nurseries would charge parents.
“While childcare providers aren’t allowed to charge explicit top-up fees, many will levy activity fees, meal charges or nappy costs to help make up the shortfall. This means the savings might not be quite as high as some parents are expecting.”
What is the government doing to address the shortage of childcare places?
Over 320,000 additional children are now accessing 15 hours of government-funded childcare per week since the policy was rolled out in September this year, according to the Department for Education.
Concerns have previously been raised about capacity in the system and whether there are enough nursery spaces to support demand. The rollout of new places will come as good news to parents – but there is still a way to go.
Reeves has promised £1.8 billion to support the expansion of government-funded childcare, and a further £15 million to expand school-based nurseries. “Protecting funding for education was one of the things I wanted to do first because our children are the future of this country,” she said.
The government has advised that primary schools can now apply for up to £150,000 of the £15 million. The first stage of the plan will look to support up to 300 new or expanded nurseries across England.
To support parents, particularly those from disadvantaged backgrounds, the government has also promised to triple its investment in breakfast clubs to over £30 million.
