Childcare Funding in the UK: 2026 Guide for Parents

Childcare can be one of the biggest expenses for families with young children, so understanding what financial support is available can make planning nursery much easier.

If you are looking into childcare funding in the UK, you may have come across terms such as 15 funded hours, 30 funded hours, Tax-Free Childcare and funded nursery places. Knowing which support applies to your family and how it works can sometimes feel confusing.

In this 2026 guide, we explain the main childcare funding options available to eligible families in England, including funded hours for younger children and what parents should know before choosing a nursery.

Important: Childcare funding eligibility depends on your circumstances. The information below reflects the 2026 arrangements for England. Always check the latest government guidance before making childcare or financial decisions.

What Is Childcare Funding?

Childcare funding is government support designed to help eligible families with the cost of early education and childcare.

For parents of young children, the main support includes funded early education hours through an approved childcare provider.

The amount of support you can receive depends on factors such as:

Your child’s age
Whether you are working
Your income and circumstances
Your child’s circumstances
The type of childcare you use
Whether your childcare provider offers funded places

The Department for Education’s 2026–27 early-years funding framework includes funded entitlements for eligible working parents as well as support for certain families of two-year-olds.

What Childcare Funding Is Available in 2026?

For families in England, the main funded early-years entitlements include:

Up to 30 hours for eligible working parents
15 hours for eligible two-year-olds receiving additional support
15 hours for all eligible three and four-year-olds
An additional 15 hours for eligible working parents of three and four-year-olds

The eligibility rules and the age at which a child can start receiving funded hours depend on the particular entitlement.

For parents with a two-year-old, the first two options are particularly relevant.

30 Hours of Funded Childcare for Eligible Working Parents

Eligible working parents can receive up to 30 hours of funded childcare per week for 38 weeks of the year.

The working-parent entitlement covers children from nine months until they reach school age, subject to the eligibility requirements.

Eligibility is based on the government’s rules relating to factors such as employment and income.

If you think you may qualify, you should check your eligibility through the official government childcare service and apply for your childcare code where required.

This funding can make a significant difference to families who would otherwise need to pay for all of their nursery hours themselves.

15 Hours of Funded Childcare for Some 2-Year-Olds

Some two-year-olds can receive 15 funded hours per week for 38 weeks of the year if their family meets the relevant eligibility requirements.

This entitlement is aimed at families receiving additional support and is separate from the working-parent entitlement.

The Department for Education refers to this as the 2-year-old entitlement for families receiving additional support.

If you are unsure whether your child qualifies, check with your local authority or through the relevant government childcare guidance.

15 and 30 Hours for 3 and 4-Year-Olds

Once a child reaches three, different funded childcare arrangements apply.

Eligible three and four-year-olds can receive the universal 15-hour entitlement. Eligible working parents may also qualify for an additional 15 hours, giving up to 30 funded hours per week for 38 weeks of the year.

This means childcare funding can continue to support families as children move through their early years.

However, the exact date from which your child becomes eligible depends on their date of birth and the relevant term.

What Does "Funded Hours" Actually Mean?

One important point for parents is that funded hours do not necessarily mean that every childcare cost is free.

The government provides funding to local authorities, which then fund childcare providers delivering the relevant entitlements.

Nurseries may have their own arrangements for how funded hours are used across the year.

You may also need to pay for:

Additional hours outside your funded entitlement
Extra sessions
Optional services
Certain consumables or additional activities, where applicable

This is why parents should always ask a nursery to explain exactly how funding will affect their individual bill.

Can Funded Hours Be Used All Year?

The standard entitlement is generally based on 38 weeks of the year.

Some childcare providers may offer different arrangements, such as spreading funded hours across more weeks of the year.

The number of funded hours you receive does not automatically mean you can use the full entitlement every week throughout the entire year.

When comparing nurseries, ask how the provider structures its funded hours and whether its arrangement suits your working pattern.

How Childcare Funding Affects Your Nursery Bill

Understanding funding is particularly important when calculating your actual childcare costs.

For example, you may need childcare for more hours than your funded entitlement covers.

In that situation, you could still have to pay for the additional hours.

This is why parents should avoid assuming that receiving 15 or 30 funded hours means they will have no nursery fees to pay.

Before accepting a place, ask the nursery:

“How much will I actually pay after my funded hours have been applied?”

A nursery should be able to explain how its funding arrangements work and what, if anything, you will need to pay.

What Are the 2026 Childcare Funding Rates?

You may see searches for childcare funding rates 2026 or early years funding rates 2026.

It is important to understand that the government’s funding rates are not simply a standard amount that every parent receives directly.

For 2026–27, the Department for Education publishes funding rates for local authorities. The rates vary according to the child’s age and local authority. The national average funding rate for the two-year-old entitlements for 2026–27 is £8.90 per hour.

This figure should not be treated as the price a nursery must charge parents or as a cash payment made directly to parents.

Providers can have their own fee structures and arrangements for funded places.

For parents, the more useful question is usually:

“What will my nursery charge me after applying my funded entitlement?”

What Is Tax-Free Childcare?

Tax-Free Childcare is another form of government support that can help eligible working families with childcare costs.

Rather than providing funded nursery hours, the scheme helps parents pay for registered childcare.

The government contribution and eligibility requirements are separate from the funded-hours schemes.

Depending on your circumstances, you may be able to use Tax-Free Childcare alongside other forms of childcare support, although specific rules apply.

Parents should check the latest government guidance to understand which combination of support they can use.

How Do I Apply for Childcare Funding?

The application process depends on the type of support you are applying for.

For funded hours for eligible working parents, you generally need to check your eligibility and apply through the government’s childcare service.

If you qualify, you may receive a childcare code which you then provide to your nursery or childcare provider.

It is important to apply in good time because funding usually starts from a particular term depending on when your application and eligibility are confirmed.

Your nursery can also help explain what information it needs from you.

What Should Parents Ask Their Nursery About Funding?

Before accepting a funded childcare place, ask:

Do you accept funded childcare?
Which funded entitlements do you offer?
Is my child’s place eligible?
How are funded hours structured?
Can funded hours be stretched across more weeks?
Are there additional charges?
What happens if I need extra hours?
What will my monthly bill be after funding?
What happens during nursery holidays?
What documents or childcare codes do you need?

These questions can help you understand your actual childcare costs before your child starts.

Childcare Funding at Caring Hands

If you are looking for a nursery in Fulham, Caring Hands provides early years childcare for children aged 2 to 5 years.

We offer an EYFS-led approach designed to support children’s learning, development and wellbeing through play and everyday experiences.

Caring Hands also accepts funded childcare for eligible families.

If you are considering a funded nursery place, we recommend discussing your child’s age, eligibility, preferred sessions and childcare requirements directly with the nursery.

You can learn more about Caring Hands childcare services in Fulham and the options available for your family.

You can also explore our Caring Hands nursery and kindergarten to find out more about our early years provision.

FAQs About Childcare Funding in the UK

What is childcare funding?

Childcare funding is government support that helps eligible families access early education and childcare. Different schemes are available depending on a child’s age and family circumstances.

How many funded hours can a 2-year-old get?

Eligible two-year-olds may receive either 15 funded hours through the additional-support entitlement or up to 30 funded hours through the eligible working-parent entitlement, depending on which eligibility criteria they meet.

Are 30 hours of childcare completely free?

Not necessarily. Funded hours cover eligible childcare hours, but parents may still have costs for additional hours or other charges depending on the nursery’s arrangements.

What are the childcare funding rates for 2026?

For 2026–27, the national average local-authority funding rate for the two-year-old entitlements is £8.90 per hour. Local authority rates vary, and this is not necessarily the amount a parent pays or receives directly.

Can I use Tax-Free Childcare with funded hours?

It may be possible to use different forms of childcare support depending on your circumstances, but specific rules apply. Check the latest GOV.UK guidance before applying.

Does Caring Hands accept funded childcare?

Yes. Caring Hands accepts funded childcare for eligible families. Contact the nursery to discuss your eligibility and available sessions.

Final Thoughts

Understanding childcare funding in the UK can make planning nursery much easier, particularly if you have a two-year-old and may be eligible for funded hours.

The main thing to remember is that funded childcare is based on specific eligibility rules and does not always mean your entire nursery bill will be covered.

Before choosing a nursery, check your eligibility, understand how the provider applies funded hours and ask for a clear estimate of what you will actually pay.

For families looking for childcare in Fulham, Caring Hands offers early years provision for children aged 2 to 5, including funded childcare for eligible families.

Get in touch with Caring Hands to discuss your child’s childcare needs, funding and available nursery sessions.