Last year, the government announced its plans to reform the UK childcare system, making the vast majority of working families eligible for free childcare hours.
The first phase of the rollout began on 1 April this year, giving 15 hours of free childcare to the parents of two-year-olds. The government plans to extend the policy to younger children from September 2024, before doubling the provision to 30 hours from September 2025.
This comes at the same time as the child benefit charge is being reformed, meaning thousands more families will be able to hold onto the perk from 6 April.
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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, limited nursery places, and a change in government.
We delve into what you’re entitled to and how to apply, before taking a look at what Labour might do with the free childcare policy if they win the next election.
What free childcare support is available from April?
The new childcare support is being rolled out in three phases:
- April 2024: As of 1 April, eligible parents are entitled to fifteen hours of free childcare per week for two-year-olds.
- September 2024: From September, this support will be extended further to cover children aged nine months to three years.
- September 2025: The final phase of the rollout will come into effect in September 2025, when the allowance will be doubled to 30 hours 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 arrangements for your child during the holidays.
Eligibility criteria: Am I entitled to 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.
To apply, both parents must be in work and earning a minimum of £183 each per week. This is equivalent to 16 hours at the National Minimum or Living Wage. Further details can be found at childcarechoices.gov.uk.
How much money will the free childcare policy save me?
The new policy could save working families thousands of pounds each year.
According to the National Childbirth Trust (NCT), the average cost of sending an under two to nursery part time is £138 per week (25 hours). Meanwhile, if you need full-time support, you can expect to pay significantly more. Full-time nursery fees amount to an average £263 per week (50 hours), with the costs in inner-city locations like London coming 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.
How do I apply for free childcare?
If you meet the eligibility criteria and your child is aged one year and 36 weeks, you can apply now on the government website.
You should apply in good time to make sure you receive your free childcare code before the new term starts. The government recommends sticking to the following dates:
| Your child's birthday | When they can get their hours from | Recommended time to apply |
|---|---|---|
| 1 January to 31 March | Term starting on or after 1 April | 15 January to 28 February |
| 1 April to 31 August | Term starting on or after 1 September | 15 June to 31 July |
| 1 September to 31 December | Term starting on or after 1 January | 15 October to 30 November |
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. Finally, you will need to provide your child’s UK birth certificate reference number.
Remember, to avoid missing out, you will need to reconfirm your eligibility every three months in case your circumstances have changed.
What if I’ve missed the application deadline?
While the government recommends applying within the above windows, the very latest you can apply for your free childcare code is the month before the new term starts. For example, the application cut-off date for a term starting in April would be 31 March.
However, it’s always a good idea to act as early as possible – because while you might be able to secure your government code at relatively short notice, you may struggle to find a nursery place. Some providers have waiting lists of up to two years.
If you haven’t applied for a free childcare code for the summer term already (April to July), you are too late to secure funding for the term. You will need to apply for the next term instead, which begins in September.
Where can I use my free childcare allowance?
You can use your free childcare allowance with any of the following providers, as detailed on the government website:
- Full day care providers (e.g. nurseries)
- Schools
- Childminders
- Sessional providers (e.g. playgroups)
- Sure Start Children’s Centres
- After school clubs
It is worth checking with your provider before signing up to ensure they participate in the scheme.
What childcare support is available for children under two?
If your child is under two, unfortunately you will have to wait a little longer. Fifteen hours of free childcare won’t be extended to younger children until September 2024.
However, you could be eligible for tax-free childcare as part of an existing scheme, which could help lighten the burden in the meantime.
Under this scheme, the government will contribute an additional 20% on top of any childcare fees you pay, contributing anything up to a maximum of £2,000 per year (or £4,000 per year for disabled children).
It’s worth looking into this scheme to make sure you’re not missing out. More than one million families are eligible, but only 484,000 families made use of the allowance in November 2023, according to the latest quarterly data from HMRC.
You can apply via the government website.
Childcare shortages: will I be able to find a nursery place?
Critics of the government’s new childcare policy have raised concerns about the number of nursery places available.
The new policy is expected to prompt a surge in demand, as parents take advantage of the scheme and return to the workplace. Meanwhile, childcare workers report being forced out of the sector on account of low pay, as the cost of living crisis rages on.
A survey from children’s charity Coram revealed that only 27% of local authorities are “confident” or “very confident” that they will be able to meet the demand when the policy is expanded in September 2024. This falls to 12% for the September 2025 expansion, which will see the allowance double from 15 to 30 hours.
The government has taken some steps to address the shortfall, investing £200 million into the sector in funding in September 2023. It has also promised over £400 million in 2024-2025 to raise the hourly rates paid to childcare providers.
“Setting funding rates [...] much higher than current market prices should incentivise providers to sign up for the new entitlements”, says Christine Farquharson, associate director at the Institute for Fiscal Studies.
In addition to this, the government is trying to incentivise new recruits by offering a £1,000 bonus when they begin their first childcare role.
Education secretary Gillian Keegan and the Department for Education published a statement on 1 April, when the first phase of the policy came into effect. This reiterated the government’s confidence in the scheme, and added that “the government is expected to provide a formal update on [the] take-up [of places] in the middle of April”.
Will Labour scrap the free childcare policy?
A date for the general election has not yet been set, but the very latest it can take place is 28 January 2025. Voters will almost certainly head to the ballot box before this, though, with Rishi Sunak saying that his “working assumption” is that it will be held in the second half of this year.
The polls suggest that a Labour victory is pretty much in the bag – which could throw a question mark over the future of the free childcare policy. Details of what a Labour government could look like are now emerging, as both parties start to outline their election policies.
Shadow education secretary Bridget Phillipson told the BBC on 27 March that the party would not commit to the £4 billion free childcare scheme, describing the current system as a “total mess”. She added that the party has commissioned former Ofsted chief inspector Sir David Bell to conduct a childcare review.
Speaking to Sky News on 1 April, however, Labour frontbencher Nick Thomas-Symonds subsequently insisted that Labour would not reduce the number of free childcare hours that the Conservatives have promised.
Parents will be watching closely to see how this plays out in the coming months.
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