Income & Employment Guides UK — Maximise Your Earnings

Cost of Childcare UK 2024 — What Parents Actually Pay

Complete guide to UK childcare costs. Nursery fees, childminder rates, nanny costs, and all the ways to reduce what you pay through government schemes.

By PocketWise · · 4 min read

Salary and income data is based on ONS and other official UK statistical sources. Figures are averages and may not reflect your individual circumstances.

Childcare is one of the biggest costs for working families. Here’s what you’ll pay and how to reduce it.

Average Childcare Costs

Nursery Costs

Child Age Part-Time (25 hrs) Full-Time (50 hrs)
Under 2 £650-£1,000/month £1,000-£1,600/month
Age 2 £600-£950/month £950-£1,400/month
Age 3-4 £500-£800/month £850-£1,200/month

By Region

Region Average Full-Time (Under 2)
London (Inner) £1,400-£2,000/month
London (Outer) £1,200-£1,600/month
South East £1,100-£1,400/month
South West £950-£1,200/month
Midlands £900-£1,100/month
North £850-£1,050/month
Scotland £900-£1,100/month
Wales £850-£1,000/month

Other Childcare Types

Type Typical Hourly Full-Time Monthly
Childminder £5-£8 £800-£1,200
Nanny (gross) £12-£18 £2,000-£3,500
Nanny share £6-£9 per family £1,000-£1,800
Au pair £80-£140/week £320-£560 (plus board)

Free Childcare Hours

Universal Entitlement

Age Hours Who For
3-4 years 15 hours/week All children
Term-time 38 weeks/year 570 hours total
Stretched Can spread over year Fewer hours, more weeks

Working Parents Entitlement

Age Hours Eligibility
9-23 months 15 hours/week Working parents (from April 2024)
2 years 15 hours/week Working parents
3-4 years 30 hours/week Working parents

Eligibility for Working Parents Hours

Requirement Details
Both parents working Or one if single parent
Minimum earnings £8,670/year each (16 hrs × NMW)
Maximum earnings Under £100,000/year each
Not using Tax Credits childcare Check which is better

Value of Free Hours

Free Hours Annual Value (at £6/hr)
15 hours/week, term-time £3,420
30 hours/week, term-time £6,840
15 hours stretched Same total, spread

Tax-Free Childcare

How It Works

Feature Details
You pay Into government childcare account
Government adds 20% top-up
Maximum top-up £2,000/year per child
You contribute £8,000 to get £2,000 bonus

Eligibility

Requirement Details
Both parents working Minimum £8,670/year each
Maximum income Under £100,000 each
Child age Under 12 (or 17 if disabled)
Not using Tax Credits Choose one scheme

What It Covers

Covered Not Covered
Nursery Informal childcare
Childminder Family (unless registered)
After-school clubs School fees
Holiday clubs Food/activity costs separately
Nanny (if registered) —

Example Savings

You Pay Annually Government Adds Total for Childcare
£8,000 £2,000 £10,000
£4,000 £1,000 £5,000
£2,000 £500 £2,500

Childcare Vouchers (Legacy)

If You Already Have Them

Feature Details
Closed to new joiners Since October 2018
Keep if already enrolled Can continue using
Tax-free amount Up to £55/week (basic rate)
Compare May be better than Tax-Free Childcare

Which Is Better?

Tax-Free Childcare Childcare Vouchers (if enrolled)
20% bonus regardless of tax band Higher rate taxpayers save 40%
More flexible Less flexible
Higher maximum Lower maximum
Better for: most people Better for: higher earners already enrolled

Universal Credit Childcare

If You’re on Universal Credit

Feature Details
Covers Up to 85% of childcare costs
Maximum (1 child) £1,014.63/month
Maximum (2+ children) £1,739.37/month
Must be Working and using registered childcare

How It Works

Step What Happens
Pay upfront You pay childcare provider
Report costs Through UC journal
Reimbursement Up to 85% in next payment

Compare with Tax-Free Childcare

Universal Credit Childcare Tax-Free Childcare
85% covered 20% bonus
Paid arrears Pay into account
For UC claimants For higher earners
Can’t use both Choose one

Reducing Childcare Costs

Maximising Free Hours

Strategy Benefit
Apply for 30 hours If eligible, big saving
Check 2-year-old funding If eligible
Use all hours Don’t leave any unused
Stretched hours May suit better

Other Savings

Strategy Potential Saving
Term-time only jobs Reduces childcare need
Flexible/part-time work Fewer childcare days
Grandparent help Free (if available)
Working from home May reduce hours needed
Shift working One parent always home

Childminder vs Nursery

Factor Consider
Cost Childminders often cheaper
Hours May be more flexible
Siblings Often discount for multiple children
Free hours Apply at both

Applying for Support

How to Apply

Scheme How
Free childcare hours gov.uk childcare service
Tax-Free Childcare gov.uk childcare account
Universal Credit help Through UC journal

What You Need

Information Why
National Insurance numbers Both parents
Employer details To verify working
Estimated annual income Eligibility check
Child’s date of birth Determines entitlements

Reconfirming

Scheme How Often
30 hours free Every 3 months
Tax-Free Childcare Every 3 months
UC childcare Report when costs change

Summary: Childcare Costs Quick Reference

Typical Costs

Type Monthly (Full-Time)
Nursery (under 2) £1,000-£1,600
Nursery (age 2) £950-£1,400
Nursery (age 3-4) £850-£1,200
Childminder £800-£1,200
Nanny £2,000-£3,500

Help Available

Scheme Benefit
15 hours (universal, 3-4) £3,000+/year
30 hours (working parents, 3-4) £6,000+/year
Tax-Free Childcare Up to £2,000/year
UC childcare element Up to 85% covered

Checklist

Action Done
Calculate childcare needs ☐
Check free hours eligibility ☐
Compare Tax-Free Childcare vs UC ☐
Apply for government schemes ☐
Reconfirm every 3 months ☐

Key Dates

Age Entitlement Starts
9 months 15 hours (from April 2024)
2 years 15 hours (working parents)
3 years 15/30 hours

Childcare is expensive, but government schemes can significantly reduce costs. Always check eligibility and apply for everything you’re entitled to.

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Sources

  1. ONS — Annual Survey of Hours and Earnings