Estimates show that average childcare costs range from £125.91 per week for part-time childminders to £285.31 for full-time nurseries, leading to annual expenses between £6,500 and over £14,000 for children under two.

Parents of children under two may face additional costs for extra childcare hours, which can add between £4,547 and £8,385 annually, even after accounting for tax-free benefits.

Purnima Tanuku, CEO of NDNA, warns that without fair compensation from the government, which is the primary customer of nurseries, many may be forced to close.

Childcare is a critical support for working families in the UK, particularly given that statutory maternity leave lasts only 39 weeks and children do not start school until age five.

According to OECD estimates, the UK ranks as one of the most expensive countries for childcare, with costs consuming approximately 19% of average income, significantly above the OECD average of 10%.

In comparison to other European nations, UK childcare costs are notably higher, with countries like France, Poland, and the Netherlands having much lower percentages of income spent on childcare.

Despite tax-free childcare benefits of up to £2,000, full-time childcare can still account for 31% to 37% of the average income, making it a substantial financial burden.

While funding for childcare providers will only increase by 4%, staffing costs are projected to rise by 15%, placing additional financial strain on nurseries and parents alike.

Due to inadequate government funding, nurseries are projected to incur significant losses, estimated at £2.25 per hour for 3-4 year-olds and £1.64 for 2-year-olds.

Starting in September 2024, the government will partially fund childcare for children aged 9 months to 2 years with 15 free hours per week, while children aged 3-4 will have access to 30 free hours weekly.

A survey by the National Day Nurseries Association (NDNA) reveals that 96% of nurseries in the UK are planning to increase fees in response to rising employer national insurance contributions.

The increase in national insurance contributions is expected to lead to an average fee hike of 10% at nurseries, further exacerbating the already high childcare costs.