The government has launched a new crackdown on hidden childcare charges, amid growing concern that families are being forced to pay unexpected fees despite promises of “free” childcare
support.
Education Secretary Bridget Phillipson has written to the Competition and Markets Authority (CMA), calling for an investigation into practices that leave parents paying extra costs such as non-refundable deposits, compulsory add-ons, and additional hours in order to secure nursery places.
The move comes as ministers face mounting pressure over the affordability of childcare, with many parents saying the system is falling short of expectations. Although eligible families are entitled to 30 hours of funded childcare, some providers have been accused of attaching extra conditions and charges that significantly increase the overall cost.
Government figures show nearly three-quarters of parents are dipping into savings to meet childcare expenses, while more than a quarter say affordability remains the biggest obstacle to accessing suitable care.
Alongside the CMA intervention, ministers have unveiled a new online cost-of-living tool designed to help families understand their childcare entitlements, compare local options, and plan household budgets more effectively.
The platform will also feature a pilot childcare map, initially launching in Bristol, South Gloucestershire, and Bath and North East Somerset. The service aims to help parents locate nearby funded childcare providers while giving nurseries and childminders greater visibility. A nationwide rollout is expected later this year.
The government says existing childcare support is already saving eligible families an average of £8,000 per child annually, with more than 500,000 families currently benefiting from funded hours.
Phillipson said the reforms were intended to ensure parents received the support they had been promised.
“I grew up in a family that knew what it meant to count every penny,” she said. “The vast majority of nurseries and childminders have been brilliant in helping us deliver, but I will not accept the small minority letting families down.”
The government has also asked the CMA to examine the growing role of private equity and alternative ownership models within the childcare sector, amid concerns they may be contributing to rising costs and financial instability among providers.
The childcare measures form part of a broader government push to reduce pressures on household finances. Ministers also highlighted the recent launch of GOV.UK Chat, an AI-powered tool designed to answer public questions about government support services in plain English at any time of day. Photo by Lucélia Ribeiro, Wikimedia commons.
