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Government-funded childcare has cut costs on childcare for families in half – saving an average of £8,000 a year

ended 18. March 2026

New research has found government-funded childcare has cut costs on childcare for families in half, with working parents now saving an average of £8,000 a year, the government has announced.

According to Coram Family and Childcare’s annual Childcare Survey, costs of a part-time childcare place have now dropped back to the same level as 2005 - reversing more than two decades of rising costs in just two years and giving more children the very best start in life.

The report is clear-cut evidence that the government’s childcare reforms are putting money back in the pockets of working families, after the successful roll out of 30 hours government-funded childcare to over half a million families last September.

The Coram report finds that the cost of a full-time (50-hour) place for a child under two has fallen by 52% compared to 2024 – from around £305 per week to £149.

  • Do enough parents know about the funding?
  • What else should they know which they don't?
  • Should the government be doing more for parents?

Responses asap.

2 responses from the Newspage community

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Kate Underwood
Founder & Chief People Strategist at Kate Underwood HR and Training
The childcare funding sounds brilliant until you're a small business trying to keep your team together. Yes, parents are saving money, and that's genuinely good news. But here's what nobody's talking about: do working parents actually know they're entitled to it? And more importantly, can they even find a childcare place to use it? Nurseries are closing because the funding doesn't cover their costs. Waiting lists are months long. So you've got parents who qualify for support but can't access it, and small businesses losing staff because childcare is still impossible to arrange. The government should be shouting about this funding from the rooftops, not assuming people will stumble across it. And they need to make sure childcare providers can actually survive on what they're being paid. Saving parents £8,000 means nothing if there's nowhere for their kids to go. For small employers, this is still a retention crisis waiting to happen.
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Rohit Parmar-Mistry
Founder at Pattrn Data
Cheaper childcare is a genuine win, but the bigger problem is not price. It is predictability. Parents cannot plan work around a system that changes by term, by age band, and by provider capacity.

In practice, awareness is patchy and the rules feel like a tax form. Many families do not realise how the funded hours interact with Tax-Free Childcare or Universal Credit, or that ‘30 hours’ often means term-time only, with extra charges for meals, nappies and wraparound. That is where the surprise bills come from.

The other risk is supply. If funding rates do not cover staff costs, nurseries will cap places or quietly nudge families into paid top-ups. Then parents fall back on grandparents or reduce hours anyway. Government should be doing more, but not with another headline. Make the journey idiot-proof, publish local availability and wait times, and stabilise provider funding so parents can trust the offer will still exist next year.