Understanding Nursery Fees and Funding: A Clear Guide for Parents

Nursery fees and funding can feel confusing, even for parents who have been through the system before. There are different age groups, different types of support, and guidance that can feel difficult to interpret at first. At Blue Windmill Day Nursery, our aim is to explain things clearly and calmly, so families can understand how childcare costs work without feeling overwhelmed.

Nursery care has one overall cost — the cost of providing safe, high-quality early years education and care. This includes qualified staff, appropriate ratios, safe and welcoming spaces, meals, resources and the time needed to support each child properly. For eligible children, part of this cost is covered by government funding, which is paid directly to the nursery. This funding reduces the amount parents are charged for the hours their child attends, rather than changing the type or quality of care provided.

Government funding is linked to a child’s age and, in some cases, family circumstances. What applies at one stage may change as children grow older, which is why funding arrangements are reviewed regularly. You can check eligibility and reconfirm codes using the government’s Childcare Choices website (part of the Best Start in Life programme).

Because Blue Windmill Day Nursery operates all year round rather than term-time only, funded hours are usually offered as a stretched arrangement. This means that instead of being used only during school terms (38 weeks a year), funded hours are spread across the full year. Many families find this approach helpful, as it provides a more consistent weekly cost and avoids large changes between term time and holidays.

Tools such as our fee calculator are designed to show how funded and non-funded hours fit together across a typical week, helping families see how different attendance patterns affect overall costs.

Some families are also eligible for support through Tax-Free Childcare. This scheme allows the government to contribute towards childcare costs, helping to reduce what families pay overall. Parents pay into an online childcare account and receive a government top-up, which can then be used to pay nursery fees. Eligibility depends on work and income.

Our aim is not to overwhelm families with detail, but to offer clear explanations and ongoing support. Fees and funding are not just about numbers — they’re about finding an arrangement that works for your family while ensuring your child receives consistent, high-quality care throughout the year.

This table shows the main types of childcare funding available in England and how they typically apply in full‑year nurseries like Blue Windmill Day Nursery.

Type of support	Who it applies to	What is provided	How it works in practice
Funded childcare hours (9 months+)	Eligible working families	Up to 15 or 30 funded hours per week (38 weeks per year)	Hours are stretched across the year in a full‑year nursery, reducing weekly fees rather than covering term‑time only
Funded childcare hours (3–4 year olds)	All children aged 3 and 4	15 hours per week, or up to 30 if eligible (38 weeks per year)	Funding is spread across the year, supporting consistent attendance rather than term‑time only care
Funded childcare hours (2 year olds)	Some children, depending on family circumstances	15 funded hours per week (38 weeks per year)	Applied to regular attendance patterns over the whole year, reducing overall nursery fees
Tax‑Free Childcare	Eligible working families	Government contribution towards childcare costs	Parents pay into an online account and receive a top‑up, which can be used to pay nursery fees

If you are considering a place at Blue Windmill Day Nursery, you might like to play around with the fee calculator on our website to estimate your monthly costs. The nursery manager can also help you calculate nursery fees, and we encourage you to come and visit, where we can discuss options in more detail.