What "funded" hours really cover

“Thirty free hours” sounds like nursery should cost nothing, and then the first bill arrives. Funded hours cover a set number of hours a year, not everything a nursery charges. This guide shows what they cover and how to work out what you will pay.

The entitlements

In England in 2026–27:

• Working parents: 30 hours a week for 38 weeks, from 9 months until reception. See 30 hours from 9 months.
• All 3 and 4-year-olds: 15 hours a week for 38 weeks.
• Eligible 2-year-olds: 15 hours a week for 38 weeks. See 15 hours for 2-year-olds.

Each is set as a yearly total: 30 hours over 38 weeks is 1,140 hours, and 15 hours is 570 hours.

Why the bill is not zero

There are three usual reasons.

1. You book more hours than are funded. A full nursery day is often 10 hours. Five days a week is 50 hours, so 30 funded hours leaves 20 hours a week to pay for.

2. The nursery is open more weeks than are funded. Funding covers 38 weeks a year. An all-year nursery is open about 51 weeks. Most spread your funded hours across the year (a stretched offer), so you get about 22.35 funded hours a week instead of 30, and pay for the rest of each week.

3. Extras. Nurseries can charge for meals, nappies, consumables and activities, as long as they are optional. See extras and consumables charges.

A worked example

Five days a week at £100 a day for 10 hours, at a nursery open 51 weeks:

• Hours booked a year: 5 × 10 × 51 = 2,550 hours
• Funded hours a year: 30 × 38 = 1,140 hours
• Hours you pay for: 2,550 − 1,140 = 1,410 hours
• Fees a year: 1,410 × £10 an hour = £14,100
• A month: £14,100 ÷ 12 = £1,175

Without funding the same booking costs £2,125 a month, so the funded hours save £950 a month. Change the numbers for your own nursery in our childcare cost calculator.

What funding does not change

• The day rate. Hours on top of your funded hours are charged at the nursery’s normal rate.
• How the nursery uses funded hours. A nursery may offer funded hours only at certain times or on certain days. Some offer a limited number of funded places for babies.
• Notice periods and deposits. Your contract still applies.

How to keep costs down

• Ask how funded hours are applied before you accept: term-time or stretched, which days, and what is charged on top.
• Check whether extras are optional, and whether you can bring food or nappies instead.
• Use Tax-Free Childcare on the rest of the bill if you are eligible. It pays 20% of the bill, up to £500 every 3 months per child.
• Consider fewer, longer days or a nursery whose sessions match your hours.
• Compare like with like using the same calculator for each nursery.

Checking you get your hours

Your invoice should show your funded hours separately from paid hours and extras. If it does not, ask the nursery to explain. If you think funded hours are not being applied properly, talk to the nursery, then to your council’s early years team.

Not sure what you qualify for? Use our funded hours checker and start date tool.