Nursery fees ‘to rise by £1,000 this year’ as childcare providers struggle with costs – forcing parents to quit work
The soaring cost of childcare in the UK is revealed in new figures today, suggesting nurseries will raise fees by £1,000 this year.
A survey of 1,156 providers by the Early Years Alliance found nine out of 10 expect to increase fees, typically in April, and by an average of 8% – higher than in previous years.
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UK childcare costs are already among the most expensive in the world, with full-time fees for a child under two at nursery reaching an average £269 a week last year – or just under £14,000 annually.
An 8% rise would take that to more than £15,000.
Three and four-year-olds in England attending a nursery or childminder are eligible for either 15 or 30 free hours a week depending on whether their parents work, so their costs are a lot lower.
There are different schemes in Wales and Scotland.
But the concern is that by this stage many parents – particularly mothers – have felt forced to drop out of work or cut their hours.
Tory MPs have been pressing the chancellor to take measures to make childcare more affordable in the March budget in order to reduce pressure on families, and enable more women to re-enter the workforce.
But an option to extend free hours to all two-year-olds is understood to have been ruled out.
Most nurseries and childminders surveyed – 87% – said the money they get from the government does not cover their costs to provide the “free” hours – leaving them out of pocket.
More than half of providers (51%) said they had operated at a loss last year. A handful said they were looking at fee increases of as much as 25%.
Becky Burdaky, 26, from Wythenshawe, Greater Manchester, told Sky News she had taken the “daunting” decision to leave her job in sales after having her second child, Bobby, last year.
Her daughter Harriet, aged three, goes to pre-school near their home, but the family found the costs they would face for their baby son beyond their reach.
She will stay at home and they will live on the wages of her partner Steve, an electrician.
‘Not asking other people to pay for my kids’
Becky said: “When we looked into the fees it was £70 a day – it would have been all of my wage. With Harriet it was about £54, so that’s a huge difference.
“And if he was home poorly, I wouldn’t get paid but I’d still have to pay his fee. Once we sat down and worked it out I would have been paying to go to work.
“I never envisaged myself being a stay-at-home mum, you know just cooking and cleaning and bringing up children, as I’ve always worked.
Becky says she could be starting from the bottom again when she returns to work
“It’s our decision to have children – I’m not asking other people to pay for my children. And I definitely don’t want people’s taxes to go up because of it.
“But I think slightly subsidising the cost of fees so it’s affordable for working parents means we can work and contribute.
“You don’t know what it’s going to be like when you return to work, you’re starting from the bottom.”
The campaign group Pregnant Then Screwed surveyed 27,000 parents last year and found nearly two thirds paid more for childcare than their rent or mortgage.
Although childcare costs have risen significantly in recent years, many providers are struggling to stay in business – with 5,400 closing their doors in the year to August 2022.
Fees for the youngest children, aged under three, are often used to keep the nurseries in business, and the rising cost of living means parents are cutting back.
‘I’ve put my savings in to cover wages’
Delia Morris is the owner of Morris Minors pre-school in Croxley Green, Hertfordshire, where children used to start aged two but are now increasingly starting at three.
She is paid £5.41 an hour by the local authority for their free hours, but says providing it costs her around £7.
“Children come in later, when they are funded,” she said.
“That’s had a huge impact. I did raise my fees a very small amount this year but it doesn’t cover it because we only have one or two children doing a couple of sessions a week [that parents pay for].
“I’ve had to put my own savings in to cover the wages last summer, and the staff had to drop a session.”
As to what the government should do, she said: “They have to put money in. It’s difficult to say, but I have to be realistic that if I can’t make ends meet I will have to close and that’s it.”
Delia Morris says the government should provide extra funding for childcare
Neil Leitch, chief executive of the Early Years Alliance, said the organisation had closed half of the 132 nurseries it operated in the last four years.
“They are exclusively in areas of deprivation, which seems to fly in the face of any levelling up agenda. These are families and children who would benefit most from support and care,” he said.
According to the OECD, the UK tops the table for the proportion of a mother’s income taken up by childcare costs – based on two children in full-time care.
‘The gender pay gap just explodes’
Christine Farquharson, education economist at the Institute for Fiscal Studies, said childcare costs for two-year-olds have risen twice as fast as inflation in the past decade – with a lasting effect on women’s pay.
“We ended up in a situation where the youngest children have the highest prices they’re ever going to pay, with the least access to government support,” she said.
“And it’s coming at this critical moment where parents are making decisions about whether or not to go back to work after they’ve been on parental leave.
“When mothers – and it is mostly mothers – make that choice to step back from the labour market it’s not just those few years. The gender pay gap just explodes and literally takes decades to come back to anything approaching the situation before they became parents.”
Proposals, championed by Liz Truss, to increase the ratio of children looked after by each adult, have attracted opposition from nurseries and parents.
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But Tory MPs are pressing the government to help parents with the cost of childcare by reducing business rates for nurseries or extending free hours to two-year-olds.
Robin Walker, chair of the education select committee, said some of the existing schemes are not working effectively – such as tax-free childcare – for which uptake is only around 40%.
Universal Credit claimants are also eligible to have up to 85% of their childcare costs funded but are put off by having to make upfront payments.
“There is money there that isn’t being used,” he said. “Upfront payment for Universal Credit and tax-free childcare are putting a lot of parents off using them at all.
“The government is already spending more than any previous government has in this space, but other countries in Europe are spending more particularly in the 0-2 age bracket.
“If we were to make the case for more investment it would unlock those opportunities for people to continue in the workplace and stimulate children in the early years.”
If they win power, Labour have promised an expansion of childcare from the end of maternity leave until the start of primary school.
Shadow education secretary Bridget Philipson told Sky News this would be a “key battleground issue” at the next election.
A Department for Education spokesperson said: “We recognise that families and early years providers across the country are facing financial pressures and we are currently looking into options to improve the cost, flexibility, and availability of childcare.
“We have spent more than £20bn over the past five years to support families with the cost of childcare and the number of places available in England has remained stable since 2015, with thousands of parents benefitting from this.”
The UK is planning to recognise Palestine as a state in a major shift in policy.
The announcement – expected today – comes ahead of the United Nations (UN) General Assembly in New York next week.
While Sir Keir Starmer signalled the move in July, it was not made official before Donald Trump’s state visit to the UK, reportedly due to fears it could have dominated the meeting with the US president.
Here is what you need to know about the significance of recognising a Palestinian state.
What is the current status of Palestinian statehood?
The Palestinian Authority (PA), led by President Mahmoud Abbas, is internationally recognised as representing the Palestinian people.
The governing body exercises limited self-rule in parts of the Israeli-occupied West Bank under agreements with Israel. It issues Palestinian passports and runs the Palestinian health and education systems.
However, some trade, investment, educational and cultural exchanges are restricted by Israel and there are currently no Palestinian airports.
The landlocked West Bank can only be reached through Israel or through the Israeli-controlled border with Jordan. Israel also controls all access to the Gaza Strip.
Much of what would form a potential Palestinian state has been under Israeli military occupation for more than half a century.
A map showing Israel and the occupied Palestinian territories
Under the Montevideo Convention of 1933, there are several criteria before Palestine can be recognised as a sovereign state under international law.
The process requires the state to have:
• A permanent population;
• A defined territory;
• An effective government and international relations;
• Formal diplomatic processes including embassies, ambassadors and treaties.
The UK did not sign the 1933 convention, but in July some of Britain’s top lawyers wrote a letter to the government’s top legal adviser warning that recognising a Palestinian state could breach the convention, which they said has become part of “customary law”.
But others, including Philippe Sands KC, a professor of law at University College London, argued against this. He told The Guardian that the UN’s top court, the International Court of Justice (ICJ), has recognised that Palestinians have a right to “self-determination” – meaning a country determines its own statehood and forms its own government.
Is the move just symbolic?
The likes of China, India, Russia and many Arab states have recognised Palestinian independence for decades, but largely see it as a symbolic gesture, which has little influence on what happens on the ground.
However, in the UK’s case, recognising a Palestinian state could put the two on “equal footing” according to the Palestinian ambassador to the United Kingdom, Husam Zomlot.
This could result in strategic partnerships or lead to steps such as banning products that come from Israeli settlements in occupied Palestinian territories, Vincent Fean, a former British consul general to Jerusalem, told Reuters.
French President Emmanuel Macron, who was the first leader of a G7 country to endorse recognition, said the recognition would also come with a commitment that the PA would enact reforms, which, he says, would put it in a better position to govern a post-war Gaza.
Naima Abu Ful holds her malnourished 2-year-old child, Yazan in Gaza. Pic: AP
Why is the UK acting now?
Sir Keir Starmer said in July that the time to recognise Palestine is now, as it would have the highest impact given the hope of a two-state solution – a “secure” Israel alongside a “viable” Palestinian state – was at risk.
He said it was part of an “eight-part plan” agreed with France and Germany, but denied it represented a U-turn after pressure from Labour MPs, saying instead it was always part of the plan to recognise Palestine.
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From July: Starmer reveals plan to recognise Palestine as state
Pressure has also been mounting on Sir Keir after Israel began a major ground offensive to take Gaza City on 16 September.
Despite widespread condemnation, Israeli tanks and troops have continued to push deeper into the city in a bid to destroy Hamas and force the release of the remaining Israeli hostages.
Foreign Secretary Yvette Cooper called the operation “utterly reckless and appalling”.
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Tanks roll into Gaza as ‘appalling’ Israeli offensive begins
The UK’s official declaration comes days before the annual gathering of world leaders at the UN General Assembly, where Gaza will be a major topic of discussion.
Israeli Prime Minister Benjamin Netanyahu is expected to talk at the assembly, but Mr Abbas has not been granted a US visa. It is likely he will instead appear via video.
What countries do (and do not) recognise Palestine?
As of September 2025, 147 out of 193 United Nations member states recognise Palestine. This includes more than a dozen in Europe, including Spain, Ireland and Norway.
Click, zoom in or search for a country to see their stance on recognising a Palestinian state:
Recognition from countries vs the United Nations
Without a full seat at the UN, the PA only has limited ability to conduct bilateral relations. This means a delegation officially representing the State of Palestine has permanent observer status but no voting rights.
Mahmoud Abbas, president of the Palestinian Authority, at last year’s UN General Assembly. Pic AP
No matter how many individual countries recognise Palestinian independence, full UN membership requires the approval of the Security Council.
Approval requires at least nine votes in favour and no vetoes by the permanent ‘big five’ member states: UK, US, France, Russia and China.
If the Council approves the request, it goes to the General Assembly for approval, where a two-thirds majority is needed.
Palestinians gather to receive food from a charity kitchen. Pic: Reuters
A state can’t join the UN without the backing of both the Security Council and the General Assembly.
In 2011, the Security Council looked at an application for Palestine to become a permanent member for several weeks but it was unable to reach a unanimous position, so a formal vote never took place.
Most recently, on 18 September, the US vetoed a Security Council resolution that had demanded an immediate and permanent ceasefire in Gaza and the release of all hostages, saying the effort did not go far enough in condemning Hamas.
How have Palestinians and the Israelis responded?
When the UK, France and Canada announced in July they were planning to recognise Palestine as a state, the PA’s leader Mr Abbas expressed “thanks and appreciation” to all three countries.
Mr Netanyahu condemned the move, saying recognising a Palestinian state would be a “launch pad to annihilate Israel – not to live in peace beside it”.
He says Israel will never give up ultimate security control of Gaza or the West Bank, and the decision to recognise Palestine as a state “constitutes a reward for Hamas and harms efforts to achieve a ceasefire in Gaza and a framework for the release of hostages”.
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Is Israel committing genocide?
What about America?
The US, Israel’s closest ally, also remains opposed to official recognition of a Palestinian state.
During a press conference with Sir Keir in the UK on 18 September, Mr Trump told reporters he has a “disagreement” with his British counterpart over it.
In reaction to European allies recognising Palestinian independence, the US has imposed sanctions on Palestinian officials.
Starmer and Trump at a joint press conference. Pic: AP
Within the US Senate, however, a group of Democratic senators have introduced a resolution to try and urge recognition of a Palestinian state – showing some divide in America’s two main political parties.
However, the resolution is unlikely to pass the chamber, where Republicans have a 53-47 majority.
How does this all link to a two-state solution?
Simply put, a two-state solution is widely regarded as the most viable framework for enabling Palestinian independence.
It would see an independent Palestinian state established alongside the existing state of Israel – giving both peoples their own territory.
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The two-state solution explained
Earlier in September, the UN General Assembly voted overwhelmingly – 142 votes in favour – to endorse a declaration outlining the “tangible, time bound, and irreversible steps” towards a two-state solution.
The declaration condemns the October 7 attacks by Hamas and the retaliatory action by Israel against civilians and infrastructure in Gaza. Israel and the US were among 10 member states that voted against the resolution.
The Palestinians seek an independent state in the occupied West Bank, annexed East Jerusalem and Gaza, territories that have been occupied by Israel since the 1967 Six-Day War.
Mr Netanyahu and most of Israel’s political class have long been opposed to Palestinian statehood, and argue that it would reward militants after October 7.
Listen to The World with Richard Engel and Yalda Hakim every Wednesday
One of the biggest obstacles to a two-state solution would be deciding what the borders of a potential Palestinian state would be.
Many believe they should be the same ones that existed before 1967, but since then, increasing numbers of Israeli settlements have been established inside the West Bank, with around 600,000 Israelis now living there and in occupied East Jerusalem.
World
‘Better late than never’: Palestinian minister says UK recognition of state would be ‘courageous step’
Britain will be taking “a courageous step at a very difficult time” by officially recognising a Palestinian state, according to the authority’s foreign minister, who told Sky News she believes the announcement – expected in the coming days – will inspire more nations to follow suit.
The Palestinian Authority’s foreign minister, Varsen Aghabekian, told me Britain’s move was “better late than never”, and said “Britain, with its weight, can influence other countries to come forward and recognise, because that is the right thing to do”.
But she also said she is “very angry” with the White House over its “unwavering support” for Israel, and said that Israel’s refusal to pass on tax revenue was pushing Palestinian civil society to the brink of “collapse”.
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Could recognition of Palestine change the West Bank?
Aghabekian was speaking as Britain, along with France, Canada and Australia, prepares to recognise the State of Palestine officially at the United Nations.
She told me: “Britain has been supporting the existence and the flourishing of Israel for some time, but I think today Britain is looking at the matter objectively, in terms of the right of people, in terms of complying with international law, and in terms of the future of this area for both the Israelis and Palestinians.”
She rejected the idea that recognising Palestine was a reward for Hamas terrorism, saying that “non-recognition” would also be a “reward to the extremists” and said that “if we wait until Israel decides it wants to go into negotiations with the Palestinians, then it won’t happen”.
Aghabekian told me she expected Gaza to be returned to the Palestinians, but I put it to her that Israeli Prime Minister Benjamin Netanyahu was being empowered by the diplomatic support he receives from America, and in particular, US President Donald Trump.
So is she angry with the White House? “Very angry, because I expect the White House and the United States of America to align with international law, with human rights, with having no double standards.
“This unwavering support for Israel, this blind support, is not only harming the Palestinians but also Israeli society.”
Read more:
What does recognising a Palestinian state mean?
Gaza could be ‘real estate bonanza’, Israeli minister says
Varsen Aghabekian speaks to Sky’s Adam Parsons
The state of Palestine is already recognised by three-quarters of the United Nations’ members. It comprises two separate territories – the West Bank, including East Jerusalem, and the Gaza Strip. Together, they are officially known as the Occupied Palestinian Territories.
The West Bank has been subject to Israeli military occupation since 1967, while Gaza has been attacked by Israel since the Hamas attacks of 7 October 2023, when nearly 1,200 Israelis were killed and around 250 people were taken hostage.
Since then, more than 65,000 people have been killed in Gaza as Israel has sought to destroy Hamas and recover its hostages. There are 48 hostages still in Gaza, with 20 believed to be alive.
She confirmed to me that Mahmoud Abbas, leader of the Palestinian Authority, which governs the West Bank, “has given guarantees in letters to various leaders around the globe that said Hamas will not be part of the governance of the Gaza Strip” and insisted there was “probably a worldwide consensus” on the topic.
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How has UK responded to Israel-Gaza conflict?
But she also insisted it was “not reasonable” to talk of completely erasing Hamas: “Hamas is an ideology, not a building that you bring down. Hamas is in people’s minds; in their heads.
“Those who support Hamas need to see a future, need to see something that is moving on the political level, need to see that there might be a state in which their children and their grandchildren might prosper.
“What people see today, whether they are Hamas supporters or not, they see darkness and they see destruction all over. They see violation of rights. They are helpless and hopeless. People need to see things are moving forward, and once that happens, there will be a shift in the mood, and they will look for a better future.”
But just as the Palestinians prepare to welcome recognition, Aghabekian said the West Bank was facing financial collapse as Israel continues to withhold hundreds of millions of dollars of tax revenue that, under a 30-year-old agreement, it collects on the Palestinian Authority’s behalf.
Israel has retained a proportion of the money since the start of the war in Gaza, but, encouraged by finance minister Bezalel Smotrich, it has recently withheld a much higher amount.
“People have not been paid, civil servants are only receiving small parts of their salaries. We can’t buy medical supplies, equipment, you name it,” said Aghabekian.
“How can a government run a country under such conditions? So yes, we are very worried.”
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