How to get help with childcare costs

How much is childcare in the UK?

The UK has some of the highest costs out of any developed country for childcare, according to the OECD. The UK childcare system is currently undergoing a massive change, giving more working parents access to free childcare hours. But it remains more expensive than most other European countries.

Average childcare costs in the UK

The children’s charity Coram reports that sending a child aged two or under to a nursery for 25 hours a week costs an average of £148.63 per week, or £7,134 per year, in the UK.

Yet these prices vary across the country. In Scotland, for example, the average cost of a child under two is £118.14 per week for 25 hours while in England it’s £150.89. The table below shows the average costs across the UK.

Average UK childcare costs

Government help with childcare costs

There are several government childcare schemes to help with the cost of childcare. Most of these schemes are means tested, and you need to apply for them to get the benefit. 

Tax-Free Childcare

The Tax-Free Childcare scheme was introduced in 2017 to help working parents with the cost of childcare.

Parents or carers must open a Tax-Free Childcare account and pay money into this. The government tops up this amount, paying £1 for every £4 you put in, up to a maximum of £2,000 per year. This doubles if your child is disabled. You pay for your childcare from this account.

It is for working parents who earn at least the Minimum Wage and less than £100,000 a year. This income limit applies to each parent. If two people in a couple earn £90,000 each, for example, they can still apply. But if one person earns more than £100,000 neither can apply.

Free childcare hours

Some parents can access 15 to 30 hours of free childcare. This system is currently undergoing a big change and more free hours are being rolled out between now and September 2025.

Until now just children aged three or over could benefit from these hours, but the age has been lowered.

The changes being rolled out are:

In England, working parents can currently apply for:

• 15 free hours a week if your child is nine months to two years old
• 30 free hours a week if your child is three to four years old

The income eligibility for free childcare hours is the same as for the tax-free childcare scheme (which can be used at the same time). Those applying must earn at least the Minimum Wage and no more than £100,000 per year. Checks will be made through HMRC when you apply.

The childcare setting must be registered ­– such as a nursery or a childminder. This scheme only applies in England. Similar help is available in Scotland (where it is called Funded early learning and childcare), Wales and Northern Ireland.

Universal Credit for childcare

You may be able to claim money through Universal Credit to help with childcare costs. If you are eligible for it, you can receive the ‘child element’, which is:

• £287.92 per month if your first or only child was born on or after 6^th April 2017
• £333.33 per month if your first or only child was born before 6^th April 2017

If you are receiving Universal Credit and working, you could claim back up to 85% of your childcare costs. You pay for the costs upfront and claim them back through your Universal Credit account. The maximum amount you could get per month is:

• £1,014.63 for one child
• £1,739.37 for two or more children

Childcare vouchers

The government used to give out childcare vouchers to working parents but this scheme has now ended. If you joined it on or before 4 October 2018, you may still receive these vouchers.

They allow you to take up to £55 per week of your wages to use for childcare costs without tax or National Insurance being taken off this amount. If you do continue to use childcare vouchers, you won’t be able to apply for Tax-Free Childcare.

Tax credits and other financial support

You may also be able to apply for tax credits to help with childcare costs. It’s always worth carrying out a free benefit check to make sure you’re receiving everything you are entitled to.

Working Tax Credits

Universal Credit is replacing Working Tax Credits. However, if you are already receiving either, you can continue to receive them until you’re moved over to Universal Credit. Working Tax Credits are available to people who work but have a low income. There is a childcare element of Working Tax Credits.

If you’re eligible you could get up to 70% of your childcare costs back, to a maximum of £122.50 per week for one child or £210 for two or more.

You can apply for this if:

• You are a single parent and work at least 16 hours a week
• You are in a couple and you both work at least 16 hours a week

There are some other circumstances where you may be able to apply, there’s a full list on the gov.uk website.

Child Tax Credits

Universal Credit is replacing Child Tax Credits. Until then, you may be able to get Child Tax Credits alongside Working Tax Credits. The amount of money you can get depends on how many children you have, when they were born, and if you already get Child Tax Credits.

• If the child was born before 6 April 2017 you can get up to £4,000 a year for your first child and up to £3,455 a year for each of your other children until they turn 16.
• If the child was born after this date, you can get £3,455 a year for each child.

Child Benefit

Child Benefit is a weekly sum now paid monthly. It is available to anyone earning £60,000 or less per year. For anyone earning between £60,000 and £80,000, the amount paid out is less. It stops completely if one parent earns £80,000 or more.

Child Benefit payments

Sure Start Maternity Grant

You could get a grant of £500 through the Sure Start scheme (in Scotland you need to apply for Best Start Grant and Best Start Foods). The Sure Start Maternity Grant is available to people receiving certain benefits who are expecting their first child. Anyone expecting a multiple birth (such as twins) who already has children at home may also qualify.

The grant is a one-off payment and it does not need to be paid back. To be eligible you must be receiving one of the following benefits:

• Income Support
• income-based Jobseeker’s Allowance
• income-related Employment and Support Allowance
• Pension Credit
• Child Tax Credit
• Working Tax Credit that includes a disability or severe disability element
• Universal Credit

Where else can I get help with childcare costs?

Certain groups, such as single parents or students, are hit hardest by high childcare fees. Half of single parents have had to borrow money to pay for childcare costs, according to the charity Pregnant Then Screwed. But there is some help available.

Support for single parents

The help available for single parents will depend on how old your children are, what your income is and where you are in the country. There is a free tool on the gov.uk website to quickly show you what help you could be getting. There are also several charities specifically to help single parents, including Gingerbread.

Childcare Grant for students

Students in England who are in full-time education with children under the age of 15 (or 17 with special educational needs) can get help with childcare costs. They could receive up to 85% of their childcare costs. The Childcare Grant is paid weekly and up to £193.62 a week is available for one child, or £331.95 for two or more children.

How to apply for childcare support

You’ll need to apply for most childcare support; you won’t get it automatically. You may need to prove your income and show your child’s birth certificate before you can receive any money through these types of early years funding.

Application process for government schemes

There is a different process for each government childcare scheme. It can be confusing to work out which is best for you, but there is a free government advice line you can use on 0300 123 4097.

You can usually apply online, by post or by phone for most schemes. You will usually need to show the following information:

• Your name and address
• Details of your partner (if you have one)
• Your income (payslips)
• Details of any benefits you’re currently receiving
• Proof of your identity
• Your child’s birth certificate

Where to apply for government childcare help

Summary: Navigating childcare costs in the UK

Parents in the UK pay some of the highest childcare costs but there is help available. From free childcare hours to support through Universal Credit, it’s important to claim what you’re eligible for. If anything changes in your circumstances, such as you get a pay rise or you lose your job, you need to update your details. You can usually do this via your childcare account or your Government Gateway account.