Findings from its Early Years Providers survey reveal that ‘mean’ fees for children under the age of two have risen from £6.05 in 2023 to £6.60 per hour this year.
A breakdown of the figures by provider type shows private group-based providers have increased their fees the most, by 11 per cent on average to £7.86 per hour. Childminders continue to charge the lowest hourly fee at £6.05.
Fees for two year olds have also risen by an average of 8.1 per cent from £6.07 to £6.56, as have fees for three and four-year-olds – an increase of 6.8 per cent between 2023 and 2024 to £6.30.
According to the data, in 2024, ‘mean’ hourly fees were highest in London, followed by the South- East and East of England. They were lowest in Yorkshire and The Humber and the North-East.
It comes after the release of next year’s funding rates, which have risen by 3-4 per cent, leading early years organisations to warn that it won’t be enough for providers to recoup the extra money they will have to pay for employer National Insurance contributions (NICs) and the national minimum wage, meaning many will be forced to increase their fees or shut completely.
'At a time when Government has identified the need to ensure that all children have access to a quality early education as priority, ministers must do more to ensure places are affordable'.
The Early Years Alliance said it was not surprised that parent fees have increased ‘so sharply’ over the past year.
Chief executive Neil Leitch added, ‘We know that this trend is very likely to continue. With recent confirmation that funding across all age groups will increase by just 3-4 per cent, despite minimum wage increases of up to 18 per cent plus the significant additional pressure of National Insurance changes, it's clear that these fee increases are likely to be significant.
‘At a time when Government has rightly identified the need to ensure that all children have access to a quality early education as a policy priority, ministers simply must do more to ensure that early years places are affordable – and of course, this is especially critical given that those on the lowest incomes are the most likely to be excluded from the funded entitlement offers, most of which are aimed specifically at “working families”.
Purnima Tanuku, chief executive of the National Day Nurseries Association (NDNA), commented, 'As nurseries are faced with additional staffing costs from April, unfortunately they will have no choice but to have to keep adding more to their fees so they can remain sustainable.'
Other key findings from the Department for Education’s (DfE) survey include:
- Around 30 per cent of school-based providers and group-based providers employ temporary staff. Between 2023 and 2024 the number of temporary staff employed by school-based providers increased by 6 per cent from 5,400 to 5,700. The number of temporary staff employed by group-based providers stayed almost the same (20,700).
- There were an estimated 30,500 childcare apprentices in 2024, an increase of 4,500 (or 17 per cent) from 2023. Almost all (28,900) of these apprentices were employed by group-based providers.
- Group-based providers had 40,200 paid childcare staff leave in 2024 but recruited 58,900. On average, 2.9 staff joined group-based providers and 2.0 left.
- Turnover rates for paid childcare staff in 2024 were twice as high in group-based providers (16 per cent) as school-based providers (8 per cent).
- School-based provider staff are estimated to have a median hourly wage of £17.95 per hour compared with £12.25 per hour for group-based provider staff.
- In 2024, school-based providers had an average of 5 children with SEND (an estimated 14 per cent of their registered places) and group-based providers had an average of 5 children with SEND (an estimated 12 per cent of their registered places). Childminders had the lowest proportion of children with SEND (an estimated 6 per cent of registered places).
