Parents are saving thousands of dollars less each year on free childcare than the government claims, a new study shows.
Research by prominent campaign group Pregnant then Screwed found that introducing the new 15 hours of subsidized childcare for two-year-olds would save an average of £1,440 a year, well below the £6,500 a year the government estimates parents will save when the provision is completed and rolled out.
Parents eligible for the new 15 hours of funding for two-year-olds will still find it difficult to afford childcare due to a recent surge in costs, the study found.
A quarter of parents said they would save less than £90 a month, while a fifth said they would save less than £50 a month.
Joeli Brearley, chief executive and founder of the Get It Screwed campaign group, said: “Once again, parents are footing the government’s bill because of a lack of funding.
“The problem is not with childcare providers, it’s on the doorstep of Number 10. Nurseries cannot raise the money to fill the financial gap left by years of chronic underfunding, so they have to raise fees.”
it appears after independent Parents will face childcare fee rises of up to 15 per cent due to funding gaps in Jeremy Hunt’s flagship plan to expand free childcare, it has been revealed.
The first part of the chancellor’s £4bn extension of free childcare – in an attempt to win over voters ahead of elections later this year – is due to come into effect in a week.
Under the new policy, working parents of eligible two-year-olds have been told that from April they can apply for 15 hours of free childcare per week for 38 weeks of the year.
From September 2025, working parents with children under five will be able to apply for 30 hours of free childcare for 38 weeks a year.
The latest poll from Pregnant then Screwed found that around six in 10 parents have seen the price of childcare rise in the past six months, with one in five saying they have already or are considering quitting their jobs or due to Unable to afford and reduce working hours. Afford to work.
Beginning in April, researchers surveyed more than 3,300 parents who were eligible for the new two-year-old funding.
Neil Leitch, chief executive of the Early Childhood Alliance, which represents nurseries, pre-schools and registered childminders, said: “This policy comes at the worst time for the sector. Even before it was announced, settings across the country were grappling with the impact of continued underfunding and the worst staffing crisis in years.”
Recent research by Coram Family and Childcare found that by 2023 the average cost of working full-time for a two-year-old will be £14,765 a year.
A spokesman for the Department for Education said: “We are confident in the strength of the childcare market to deliver the largest expansion of childcare services in England’s history and we are already seeing providers looking to expand their placements across the country. “
“The Institute for Fiscal Studies independently reports that the average government funded rate for children aged two and under from April 2024 is expected to be significantly higher than the market rate paid by parents last year.”
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