Families across the country will continue to benefit from more affordable, high‑quality childcare as the government confirms a record £9.5 billion investment for nurseries and childminders from next year - an increase of over £1 billion on this year’s funding.
The funding boost builds on the success of the Government’s landmark expansion of 30 hours of funded childcare, which has already supported more than half a million families since September. The programme is saving parents up to £7,500 per child each year, easing pressures from the cost of living and ensuring more children can access early education.
Average funding rates for providers will rise substantially:
- 4.3% for children under two,
- 4.4% for two‑year‑olds, and
- almost 5% for three‑ and four‑year‑olds.
These increases - well above current inflation - are designed to help nurseries and childminders expand provision, fill childcare gaps, and ensure families in every community can secure the places they need.
In a move to ensure more money reaches frontline services, local councils will be barred from holding back more than 3% of funding for central services, directing more investment straight to the providers delivering daily care.
Today’s announcement follows changes that lifted the cap on childcare benefits alongside the removal of the two‑child limit, enabling parents on Universal Credit to receive an additional £736.06 per child in childcare support if they have more than two children.
This comes alongside reforms to increase the number of school‑based nurseries and expand free breakfast clubs, saving families up to £450 per year and giving parents more flexibility and time back in the mornings.
The Early Years Pupil Premium will also rise by 15% to £1.15 per hour in 2026–27, equivalent to up to £655 per eligible child each year. This funding aims to ensure children from disadvantaged backgrounds can benefit from high‑quality early education, regardless of family income.
Bridget Phillipson, Secretary of State for Education, said:
“High-quality childcare is the first building block of national renewal, and central to how we get tens of thousands more children school-ready by age five. It shapes children’s futures, it strengthens working families, and it supports communities across our country.
“That’s why we are delivering a record £9.5 billion investment in early years, with nurseries and childminders receiving higher hourly funding rates. This is more money going straight to the frontline, helping providers grow, improve and offer every child the best possible start.
“This is how we build a brighter future for our country – by investing in children, backing families and restoring opportunity from day one.”
The announcement supports the Government’s wider Best Start in Life strategy, which aims for 75% of children to reach a good level of development by 2028. It also complements the historic Child Poverty Strategy, which includes lifting the two‑child benefit cap, expanding free school meals, and boosting access to breakfast clubs.
Together, these measures aim to create a childcare system that works for every family, in every community, for the long term.
Image credit: iStock
