From  today (1st September 2025), eligible working parents of children aged from 9 months to three years in England, will be entitled to access up to 30 hours free childcare per week during term time (over 38 weeks a year) right up to their child starting school.

Eligible working parents of three and four-year-olds already get 30 hours a week of childcare funded by the government.

Two phases of this expansion have already happened and this is the final stage of rollout.

To qualify for the hours, the majority of parents must earn more than £9,518 but less than £100,000 per year.

Inquiries for Places ‘through the roof.’

While the move increases support for women returning to work and is a positive one for working parents and employers, concerns have been raised about the availability of places due to high demand - with some regions affected more than others.

Local nursery and childminder waiting lists can be long, so getting a place within a reasonable distance from the workplace, or to suit work patterns, may be a challenge. Even when a suitable place is found, parents may need to be flexible about what days are available.

Staff Shortages

Despite increasing government funding and support for childminders, low rates of pay have contributed to a fall in their numbers. According to Ofsted figures 1,000 left childminding roles in the last year.

Recruitment and retention in the early years sector, attributed to issues around low pay and limited career progression opportunities, may prove to be a significant barrier to working parents being able to take up this new government flagship funding. The National Foundation for Educational Research estimates that 35,000 more early years staff are still needed across the range of providers to bridge the gap between demand and availability, although this may still leave regional discrepancies.

Rising Fees

A study tracking nursery fees prices over the past 18 months shows that costs have risen fastest in areas with the lowest government funding. In regions where there is more competition for places, increased demand from expanded entitlement now risks driving prices up for the hours that parents still have to pay for.

Key findings from the University of Bradford and University of Bath study show:

• Marked regional differences in childcare costs: London is the most expensive area, with the South East and South West close behind, while the North East has the lowest fees.
• Across much of England, the government’s funding rate for three-and four-year-olds falls short of the average hourly cost of childcare. As a result, nurseries may need to make up the difference by charging higher fees for places for younger children.
• Between March 2024 and March 2025, nurseries in the least well-funded areas raised fees more sharply than those in better-funded parts of the country.

The study concludes that without adequate funding, the government’s national childcare policy risks pushing up fees, reducing savings for families and deepening regional divides. The researchers will continue to track the impacts now that the final phase of the rollout is underway.

Separate research also suggests that parents are being asked to pay additional costs to cover items such as nappies and food, which may go towards making up for any funding shortfall. The government has issued guidance saying any additional costs need to be laid out clearly and are optional.

The Employer Perspective

The government’s intention is that the expansion of funded childcare hours will strengthen workforce participation and ease pressure by providing working parents with significant savings on fees.

More accessible childcare has the potential to help employers with productivity gaps by improving staff retention. As more working parents - particularly mothers - move back into the workplace, this could ease skills shortages in some sectors, reduce absenteeism, and provide greater stability for SMEs that often rely on experienced staff.

However, ongoing concerns about childcare shortages and rising fees mean some staff may still struggle to secure places that match their working hours or location.  

For businesses, this uncertainty could continue to affect workforce planning, with employees needing flexibility around start times, shift patterns, hybrid working or shorter hours in order to manage childcare arrangements.

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