How Much Does Childcare Cost in the UK? 2026 Prices

Childcare in the UK is one of the largest costs parents face, with annual bills often exceeding university tuition. As of 2026, **full-time nursery care for a child under two costs between £12,000 and £18,000 per year** depending on where you live and whether you use tax-free childcare schemes. This guide breaks down the real costs across different care types, regions, and age groups, so you can plan your budget accurately and understand where you might save money.

UK Childcare Costs by Type of Care

The cost of childcare varies dramatically depending on whether you choose a nursery, childminder, nanny, or family member. Each option has different price points and hidden costs you should know about.

Nursery Costs

Nurseries are the most common form of formal childcare in the UK. **Full-time nursery fees currently range from £900 to £1,500 per month** for children under two, with younger infants (under 12 months) typically costing 10–15% more because they require higher staff ratios. Two-year-olds are slightly cheaper, at £750–£1,200 per month, and three-year-olds drop further to £600–£1,000 once they become eligible for government Early Education and Childcare (EEC) funding.

London and the South East charge premium rates. Central London nurseries regularly charge £1,800–£2,000 per month for under-twos. In contrast, nurseries in Wales, Scotland, and Northern Ireland are 15–25% cheaper on average. Regional differences matter: Manchester nurseries cost around £1,100–£1,400 per month, while rural areas might charge £700–£950.

Childminder Fees

Childminders typically cost **£4–£7 per hour** across the UK, working out to £800–£1,400 per month for full-time care. They're often cheaper than nurseries and provide one-to-one or small-group care, though availability is variable and many have waiting lists. Childminders must be Ofsted-registered and follow the Early Years Foundation Stage (EYFS) framework, ensuring quality standards match nurseries.

Childminders may charge retainer fees if you want to reserve a place but don't use it every week, typically 25–50% of the normal rate. Holiday care during school breaks is usually an additional cost, charged at the standard hourly rate rather than being included in monthly fees.

Nanny Costs

Employing a nanny is the most expensive childcare option, with **gross salaries ranging from £22,000 to £35,000 per year** for a live-out nanny in the UK. You also pay employer's National Insurance contributions, holiday pay, and potentially Pension Auto-Enrolment contributions, pushing the real cost to **£28,000–£42,000 annually**. Live-in nannies cost slightly less (£18,000–£28,000 salary) because accommodation is provided, but total outgoings remain high when you add tax and NI.

Nannies offer flexibility (no set hours, school drop-offs, sick pay cover), but they suit families earning £65,000+ who can absorb the cost. You're responsible for employment law, tax, and compliance, making administration burdensome unless you use a payroll service (£100–£300 annually).

Government Support: Tax-Free Childcare and EEC Funding

The UK government provides two main schemes that reduce childcare costs, though eligibility is strict and the savings are often smaller than parents expect.

Tax-Free Childcare (TFC)

Tax-Free Childcare lets eligible parents save up to **£2,000 per child per year** (£4,000 for two children). For every £8 you deposit into an account, the government adds £2, capped at £500 quarterly per child. The catch: **only 28% of UK families qualify** because both parents must earn at least £15,000 annually (or be on certain benefits) and under £100,000 each. Self-employed parents often struggle to meet the earnings threshold in their first year.

Employers' Childcare Vouchers (an older scheme) are being phased out, so new parents cannot join. Existing members keep their benefits, but new families must use TFC instead.

Early Education and Childcare (EEC) Funding

All three and four-year-olds in England are entitled to **30 hours of free childcare per week** (15 hours in Scotland, Wales, and Northern Ireland). This covers nursery, childminder, or some pre-school settings. However, the hourly rate paid to providers is capped by the government at around **£5–£6 per hour**, so many providers charge "top-up" fees to cover costs. **Real parents report paying £400–£800 per month in top-ups** even with government funding included.

Two-year-olds from low-income families (roughly 40% of the population) also qualify for 15 hours per week funding. Uptake is lower than for three-year-olds, partly because top-up fees still apply and eligibility rules are confusing.

Childcare Costs by Region and Major Cities

Where you live determines costs far more than most parents realise. Here's what full-time nursery care currently costs for an under-two child:

• London (central): £1,800–£2,100 per month. Outer London (zones 3–5) is 20–30% cheaper at £1,300–£1,600.
• South East (Surrey, Berkshire, Sussex): £1,300–£1,700 per month — close to London rates.
• Manchester, Birmingham, Leeds: £1,000–£1,400 per month.
• Bristol, Edinburgh, Cardiff: £900–£1,300 per month.
• Rural areas (Devon, Norfolk, Pembrokeshire): £600–£950 per month, but fewer options and longer waiting lists.

**Moving from central London to outer London can save £6,000–£8,400 per year** for one child. If you're considering a house move and have young children, factoring in childcare savings alongside commute time and schools makes real financial sense.

Hidden Costs in Childcare: What Parents Overlook

Most parents budget only for fees and forget the extras, which add up to hundreds of pounds annually.

• Registration and settling-in fees: £50–£200 per child to secure a place (non-refundable).
• Meals and snacks: Many nurseries charge £2–£4 per day extra; some include it in fees. Childminders usually include meals.
• Nappies and consumables: Some nurseries ask parents to supply these (£10–£20 per month); others charge a materials fee (£15–£40).
• Uniform, sun cream, and activities: £20–£60 per term for trips, crafts, and branded items.
• Waiting list and deposit: A one-month deposit is standard when you enrol; you may also pay a waiting list fee (£25–£100) to reserve a place months in advance.
• Holidays and closures: Most nurseries are closed 4–5 weeks per year (Christmas, summer, Easter, bank holidays). You either pay "holiday fees" (25–50% of normal) or lose the place if you don't pay.
• Late collection charges: £5–£15 per 15 minutes after closing time — this can add £500+ per year if you're regularly late.
• Insurance and admin upgrades: Some childcare providers charge extra for accident insurance (£2–£5 per month) or online payment systems.

A nursery charging £1,200 per month in fees may actually cost you £1,450 once meals, nappies, activities, and occasional late fees are included. Always ask for a full breakdown of costs before enrolling.

How Government Funding Actually Reduces Costs

Government funding sounds generous (30 hours free for three-year-olds), but real-world savings are often 30–40% lower than families expect.

The Top-Up Fee Problem

Government funding pays nurseries approximately **£5.35 per hour** (as of 2026). Most nurseries charge parents £8–£10 per hour, leaving a shortfall. A nursery offering 30 hours of funded childcare weekly will charge parents a top-up fee of **£40–£80 per week**, or **£1,600–£3,200 per year**. Combined with the hours you need beyond 30 (most working parents need 40–50 hours), your actual monthly cost for a three-year-old remains **£600–£1,000**, not the zero most families assume.

Stretched Across the Year

Government funding is divided across 38–39 school term weeks, not 52. If your nursery applies this correctly, you should pay less in school holidays. However, some nurseries charge the same year-round, meaning you're overpaying during holidays when the child may not attend.

When Government Funding Genuinely Works

Funding saves money if your nursery is truly low-cost (£1,000–£1,200 per month for a three-year-old), you use exactly 30 funded hours plus minimal additional hours, or you use a childminder on a shared basis with other families and split the government funding discount.

How Much Should You Budget for Childcare?

For realistic planning, use these guidelines based on household circumstances:

• One child, full-time nursery, ages 0–3 (no government support): Budget £12,000–£18,000 per year (£1,000–£1,500 per month).
• One child, nursery, ages 3–5 (with 30-hour funding): Budget £8,000–£12,000 per year (top-up fees, hours beyond 30, holidays).
• Two children, both under three: Budget £22,000–£35,000 per year. Sibling discounts of 10–20% are common.
• Two children, one aged three-plus (with funding): Budget £15,000–£22,000 per year.
• Nanny care, one child: Budget £28,000–£42,000 per year (salary plus employment costs).
• Childminder, full-time: Budget £10,000–£16,000 per year.

These figures account for average UK costs. London, the South East, and affluent suburban areas will be at the upper end. Rural areas and Northern England will be lower.

Childcare Cost Tax Relief and Salary Sacrifice Schemes

Some employers offer workplace nurseries or salary sacrifice schemes, which reduce childcare costs by avoiding tax and National Insurance. If your employer offers this, you could save £1,500–£3,000 annually depending on your tax band. Check whether your employer participates; only about 15% of UK businesses offer this benefit, and it's more common in large corporates and public sector roles.

Tax relief is not available if you pay for childcare privately unless you use Tax-Free Childcare (covered above). Self-employed parents and those earning under £15,000 get no government support.

Childcare Costs When You Return to Work

**For many parents, especially mothers, childcare costs actually exceed take-home wages from returning to work**, making part-time or flexible working financially essential. If you earn £25,000 gross and pay £15,000 annually in nursery fees, the true hourly rate after tax may be £3–£5 per hour — less than minimum wage.

Consider these options: negotiate flexible or remote working with your employer to reduce childcare hours, use a childminder instead of a nursery (often 10–20% cheaper), job-share with a colleague, or delay return to work until your child accesses government funding. Some parents stay on parental leave longer or move to part-time work once the youngest reaches three years old.

Frequently Asked Questions

Is childcare more expensive in London than the rest of the UK?

Yes, significantly. Central London nurseries cost £1,800–£2,100 per month for under-twos, while comparable care in Manchester or Bristol costs £1,000–£1,400. Outer London is 20–30% cheaper than central zones. If you live in the South East, expect to pay 15–25% more than Northern England.

Does tax-free childcare apply to all parents?

No. Both parents must earn at least £15,000 annually and under £100,000 each. Self-employed parents often struggle to qualify in their first year. Roughly 72% of UK families don't meet the eligibility criteria, so check directly with the Tax-Free Childcare portal before assuming you qualify.

Do nursery fees include meals and nappies?

It varies. Some nurseries include meals, snacks, and nappies in the quoted fee; others charge £15–£40 per month extra for consumables. Childminders usually include meals as standard. Always ask for a full cost breakdown before enrolling, as add-ons can increase monthly fees by £200–£300.

How much does a nanny cost compared to a nursery?

A nanny costs £28,000–£42,000 per year all-in (salary plus employment costs), while a nursery costs £12,000–£18,000 for one child. However, nannies offer flexibility (no closing dates, school runs, sick cover) and one-to-one care, which some families value despite the higher price. Nannies only become cost-effective for families with two or more young children or very inflexible work schedules.

Can you claim childcare costs on tax?

Direct tax relief is not available for private childcare in the UK. However, Tax-Free Childcare lets you save up to £2,000 per child per year (government adds £2 for every £8 you save). Some employers offer salary sacrifice schemes that save an additional £1,500–£3,000 annually by avoiding income tax and National Insurance.