72% of UK parents are draining their savings to pay for ‘free’ childcare – and the government’s had enough
Key Points
- Education Secretary Bridget Phillipson has asked the Competition and Markets Authority to investigate hidden fees in England's 30 hours funded childcare offer.
- 72% of parents are using savings to cover extra charges including deposits, compulsory add-ons, nappies and suncream.
- 27% of parents say cost is still the biggest barrier to accessing the childcare they need.
- The CMA will also examine whether private equity ownership of nurseries is driving up costs or creating instability.
- A new free cost of living tool and childcare map have launched, with the map trialled in Bristol, South Gloucestershire and Bath and North East Somerset.
The government has ordered a competition probe into hidden childcare charges after 72% of parents said they were draining their savings to cover them.
Education Secretary Bridget Phillipson has written to the Competition and Markets Authority asking it to examine the extra fees families face on top of the 30 hours of funded childcare available in England.
The Department for Education said too many parents were being asked to pay upfront deposits, compulsory add-ons or additional paid hours to secure a place, alongside charges for basics including nappies, meals and suncream.
More than one in four parents (27%) say cost remains the single biggest barrier to accessing the childcare they need.
Funded hours are meant to be free at the point of use, with eligible families saving an average of £8,000 a year per child and more than 500,000 households now benefiting from the entitlement.
Ministers argue the extra charges undermine that offer and add pressure on working parents already stretched on day-to-day costs.
The CMA will also be asked to examine whether private equity ownership of nurseries is driving up costs or creating instability for families dependent on a local provider.
“I grew up in a family that knew what it meant to count every penny,” said Phillipson, Secretary of State for Education. “I am so proud of the crucial difference that 30 hours funded childcare makes to family finances, saving £8,000 a year per child on average.”
She said the majority of nurseries and childminders had helped deliver the entitlement, but added she would not accept “the small minority letting families down and stopping them get what they were promised”.
Alongside the referral, the government has launched a free cost of living tool to help parents find local provision and budget around what they are entitled to.
A new childcare map is being trialled across Bristol, South Gloucestershire and Bath and North East Somerset, with a national rollout due later this year.
The package sits alongside the recently launched GOV.UK Chat, an AI tool that lets parents ask questions in plain English about the support available to them.
Joeli Brearley, founder of campaigning group Growth Spurt, said the move was overdue. “Parents were promised affordable childcare, not a Trojan horse bill landing on the doormat each month,” she said.
Brearley added that taxpayer money should not be “diverted into shareholder returns instead of high-quality care and early education”, welcoming the parallel investigation into private equity.
However, the intervention has not been universally welcomed.
Neil Leitch, Chief Executive of the Early Years Alliance, told ITV News the watchdog should instead examine whether the sector is adequately funded, describing the announcement as “a bit of a PR exercise to demonstrate that the Government’s on the side of parents”.
