A Coram PACEY survey of almost 3,000 childminders in England highlights widespread concern over early years funding rates with many childminders struggling to keep their business financially viable.

The national average hourly rates for early years funding are set at £11.54 per hour for children under two, £8.53 per hour for two-year-olds and just £6.12 per hour for three-and four-year olds. There is widespread acknowledgement that the three- and four-year-old rate is insufficient to cover delivery costs. Childminders operate at much smaller ratios than nurseries (being mandated to have no more than three early years children per adult, including a maximum of one baby under the age of one) and are therefore less able to offset the losses from three-and four-year-old rates through gains from the rates for younger children. Our latest survey demonstrates this impact, with many unable to maintain sustainable childminding businesses:

• Just 4% of respondents said the three- and four-year old rate is adequate to run their business sustainably (compared to 90% for the under-two rate and 71% for the two-year-old rate).
• 70% said the current approach for early years funding does not work well for their childminding business.
• 69% said the current approach for early years funding prevents them from meeting families’ needs for childcare across all age groups.

The survey also highlights overwhelming support for funding reform:

• 90% of childminders want funding rates that reflect the distinct way they operate compared to nursery settings.
• 89% would be more likely to offer funded places for three- and four-year-olds if the funding rate was higher.

In a previous survey released in August 2025*, 31% of childminders said they had restricted the number of funded places for three- and four-year-olds and 11% stopped offering funded places for this age group altogether.

Childminders are also restricted by the rule that prevents them from claiming funding for children who are related to them. Almost 1 in 5 (18%) previously told us that they have had a relative move a child from their childminding setting in order to access early years funding elsewhere. Of those who do provide early education and childcare for a child related to them, almost half (49%) do so free of charge.

“It’s heartbreaking telling a family that you can no longer provide care when you have worked with them for two years. As a single mum, I have to put my business head on and make as much income for four spaces as I can. That means prioritising under twos. I now give notice for those turning three.” Childminder in North Yorkshire

“All of my children turn three in summer. My income will drop by £7,000 in September term. I will still be full with 3 children every day. None of my families want to use additional hours, so I cannot supplement my income from my private rate. This term, our funding payment was a week late and I was charged by my bank for going overdrawn. We have no control whatsoever over our finances and late payments can happen at any point but there’s no compensation for us. We are extremely financially vulnerable.” Childminder in Cumbria

Ka Lai Brightley-Hodges, Head of Coram PACEY comments:

“Our latest findings from nearly 3,000 childminders highlight a sector at breaking point, with an urgent call for change.

“The financial cliff-edge that childminders face when a two-year-old turns three is unacceptable. It does not cost a childminder over £2 per hour less to look after a three-year-old than a two-year-old. The government has relied on the goodwill of childminders to absorb the financial hit, but now many are being forced to limit places for three- and four-year-olds, scale back activities, or increase costs for privately-paid hours. When the system is designed around nursery ratios – which childminders do not work to – it is no surprise that childminders are having to make difficult business decisions around which children they can afford to have in their care. This is especially disheartening as these are often children they have cared for from an early age, building strong bonds and a relationship with the family.

“Amid the continued decline in childminder numbers in England, and with Ofsted’s latest figures due to be released tomorrow, we urge the government to take meaningful action to reverse this trend and set out an ambitious national strategy for childminders. Crucially, this must include a thorough review and reform of early years funding to ensure the system works effectively for all types of providers and acknowledges their unique challenges.”

ENDS

NOTES TO EDITOR 

For further enquiries please contact Ka Lai Brightley-Hodges kalai.brightley-hodges@pacey.org.uk 07720 873 824

Coram PACEY’s latest survey was carried out between 13 and 17 November 2025 and received 2,944 responses from childminders in England.

*Previous survey findings carried out between 21 and 28 August 2025 with 871 responses from childminders in England.

ABOUT CORAM PACEY

Coram PACEY is part of The Coram Group. Charity No. 312278. Registered office: 41 Brunswick Square, London WC1N 1AZ Tel 0300 003 000