UK Childcare Costs in 2025: The Complete Dad's Guide

Childcare in the UK is expensive, confusing, and varies wildly depending on where you live and whether you qualify for government support. The system has undergone major changes with expanded free entitlements, but understanding what you're actually entitled to—and what you'll actually pay—requires more than just reading the government headlines.

This guide breaks down the real costs, explains every funding option, and walks through worked examples so you can actually budget.

The Headlines: What's Changed in 2024-2025

The government has rolled out expanded childcare entitlements in England:

From September 2024:

Working parents of children from 9 months can claim 15 hours "free" childcare per week

From September 2025:

This expands to 30 hours for working parents of children from 9 months

This sounds transformative—and for some families, it is. But "free" comes with caveats, and the reality is messier than the headlines.

What Childcare Actually Costs

The Coram Childcare Survey 2025

The annual Coram Family and Childcare survey provides the most reliable UK childcare cost data. Here's what they found for 2025:

England (Part-time, 25 hours/week):

Age	Cost per week	Change from 2024
Under 2	£70.51	Down 56%
2 year-olds	£74.52	Down 30%
3-4 year-olds	£72.75	Up 5%

Wait—costs for under-2s have dropped by more than half? Yes, but only if you qualify for the new entitlements. The dramatic drop reflects the average across all families, including those now getting 15 free hours.

If you don't qualify (not working, earning below threshold, or self-employed earning under £9,518/year), you pay the full unsubsidised rate—which averages around £160/week for part-time, £260-300/week for full-time.

Regional Variation

Costs vary enormously by region:

Region	Full-time (under 2)	Part-time (under 2)
Inner London	£400-450/week	£180-220/week
Outer London	£320-380/week	£150-180/week
South East	£280-340/week	£130-160/week
South West	£260-300/week	£120-140/week
North West	£240-280/week	£110-130/week
North East	£220-260/week	£100-120/week

If you're in London or the South East, expect to pay significantly more than national averages.

Scotland and Wales

The new English entitlements don't apply:

Scotland:

Part-time under-2s: £122/week (up 7% from 2024)
1,140 hours free childcare for 3-4 year-olds and eligible 2-year-olds

Wales:

Part-time under-2s: £155/week (up 10% from 2024)
Flying Start provides free part-time childcare in some areas

Understanding the Funding Options

1. Free Childcare Entitlements (England)

15 Hours "Universal" (all 3-4 year-olds):

Available to all families regardless of circumstances
38 weeks per year (term-time)
No income test

30 Hours "Extended" (working parents):

Both parents must be working (or one parent if single)
Each parent earning at least £9,518/year (equivalent to 16 hours at minimum wage)
Neither parent earning over £100,000/year
38 weeks per year

15/30 Hours for Under-3s (working parents):

Same eligibility as extended entitlement
15 hours from April 2024 for 2-year-olds
15 hours from September 2024 for 9 months+
30 hours from September 2025 for 9 months+

How to apply:

Apply for a 30-hours code at childcarechoices.gov.uk
Enter your details and your partner's (if applicable)
You'll get an 11-digit code
Give this code to your childcare provider
Reconfirm every 3 months or you'll lose it

The "Free Hours" Catch

Here's what the government doesn't shout about: nurseries can and do charge top-up fees.

The government pays nurseries around £5-8 per hour per child. Many nurseries, especially in London and the South East, charge £10-15 per hour. The difference comes from:

Consumables fees: Nappies, food, sun cream
"Extended hours" premiums: Paying more for hours beyond the free entitlement
Additional services: Learning programmes, trips, photography

A "free" 30 hours place often costs £150-300/month in top-up fees. Budget accordingly.

2. Tax-Free Childcare

The government tops up your childcare spending by 25%, up to £2,000 per child per year (£500 maximum government contribution per quarter).

How it works:

You pay money into a Tax-Free Childcare account
For every £8 you pay in, government adds £2
You use the account to pay your childcare provider
Maximum contribution: £8,000/year from you, £2,000/year from government

Eligibility:

Working (employed or self-employed)
Earning at least £9,518/year per parent
Neither parent earning over £100,000/year
Child under 12 (or under 17 if disabled)

Example: Your nursery fees are £1,000/month (£12,000/year). You put £800/month into Tax-Free Childcare, government adds £200. You pay £9,600/year; government pays £2,400/year. You save £2,400.

How to apply:

Create account at childcarechoices.gov.uk
Verify your identity (this can be frustrating—be patient)
Set up payment to your account
Pay your provider from the account

3. Childcare Vouchers (Legacy)

Childcare Vouchers closed to new applicants in October 2018, but if you're already enrolled, you can continue using them.

How it works:

You sacrifice salary before tax and NI
This salary is converted into vouchers
Vouchers pay for childcare
Maximum: £243/month (basic rate taxpayer), £124/month (higher rate)

Should you switch to Tax-Free Childcare?

It depends on your circumstances:

Multiple children under 12? Tax-Free Childcare is likely better
One child and you're a higher-rate taxpayer? Vouchers might win
Use the government's childcare calculator to compare

4. Universal Credit Childcare

If you receive Universal Credit, you can claim back up to 85% of childcare costs:

Maximum: £1014.63/month for one child, £1739.37/month for two or more
You must pay upfront and claim back
Only registered childcare counts

This is often more generous than Tax-Free Childcare for lower-income families.

Worked Examples

Example 1: Two Working Parents in Surrey, One Child Age 2

Situation:

Both parents working full-time
Combined income: £85,000
Child in nursery 4 days/week (40 hours)
Nursery charges £80/day (£320/week, £1,387/month)

Funding:

15 free hours/week from September 2024 (worth ~£100/week)
Remaining 25 hours: £200/week
Top-up fees: £60/month for meals and consumables
Tax-Free Childcare: £173/month government top-up

Monthly cost:

Before funding: £1,387
After free hours: £867 + £60 = £927
After Tax-Free Childcare top-up: ~£750/month

Annual saving from funding: ~£7,600

Example 2: Single Mum in Manchester, One Child Age 1

Situation:

Working 30 hours/week
Earning £28,000
Child in nursery 3 days/week (30 hours)
Nursery charges £60/day (£180/week, £780/month)

Funding:

15 free hours from September 2024 (worth ~£90/week)
Remaining 15 hours: £90/week
Tax-Free Childcare: £78/month government top-up

Monthly cost:

Before funding: £780
After free hours: £390
After Tax-Free Childcare: ~£312/month

Example 3: Family in Scotland, Two Children

Situation:

Both parents working
Child 1: age 4 (getting 1,140 free hours)
Child 2: age 18 months
Nursery charges: £65/day for baby, £55/day for 4-year-old

Funding:

4-year-old: 1,140 hours free (term-time only, ~30 hours/week)
18-month-old: No free entitlement in Scotland
Tax-Free Childcare available for both

Monthly cost (term-time):

4-year-old: Top-up fees only (~£100/month)
18-month-old: £260/day x 3 days = £845/month, minus TFC = ~£676/month
Total: ~£776/month

Monthly cost (holidays):

No free hours, both children paying
4-year-old: £55 x 3 days x 4.3 weeks = £710, minus TFC = ~£568
18-month-old: £65 x 3 days x 4.3 weeks = £839, minus TFC = ~£671
Total: ~£1,239/month

Practical Tips

1. Apply Early

Free hours codes take time to process, and nurseries need notice. Apply at least 6 weeks before you need care.

2. Don't Forget Reconfirmation

Your 30-hours code must be reconfirmed every 3 months. Miss this deadline and you lose the funding. Set calendar reminders.

3. Check Your Provider Is Registered

Tax-Free Childcare and free hours only work with Ofsted-registered providers. Informal arrangements with friends or family don't qualify.

4. Consider Childminders

Childminders are often 20-30% cheaper than nurseries, and many offer excellent care. The Child Minding Association can help you find registered childminders in your area.

5. Spread Hours Across the Year

Free hours can be "stretched" across the year (fewer hours per week, but 52 weeks instead of 38). This helps with holiday care but means less per week during term-time.

6. Employer Support

Some employers offer:

Enhanced childcare vouchers
Workplace nurseries
Flexible working to reduce childcare needs
Emergency childcare schemes

Check your employee benefits—many dads don't realise what's available.

What If You Don't Qualify?

If you don't meet the working requirements for funded childcare (staying at home, earning under threshold, etc.), your options are more limited:

Universal 15 hours from age 3 (everyone qualifies)
2-year-old funding if on certain benefits
Universal Credit childcare element if you're on UC
Employer childcare vouchers if you joined before October 2018

The system is designed to support working parents, which means non-working families pay significantly more. This is a policy choice that disadvantages stay-at-home parents, particularly in the early years.

Planning Ahead

Childcare is typically your biggest expense between parental leave and school. Some families find it costs more than their mortgage.

Strategies for managing the cost:

Time parental leave carefully. If one parent can take additional leave, they might start childcare when the child is closer to 2 (cheaper rates) or 3 (free hours).
Consider working patterns. Compressed hours, part-time work, or shift-based arrangements can reduce childcare days needed.
Don't forget holiday care. School-age children still need care in the holidays—budget for this too.
It's temporary. Full-time childcare costs usually reduce dramatically once they start school at 4-5.

The costs are painful now, but they don't last forever. And the government funding, while imperfect, has genuinely made a difference for many working families.

Thinking about longer-term savings? Read our guide to Junior ISAs and child savings accounts.