What are top-up fees?

Top-up fees in early years childcare refer to any additional charges a nursery or pre-school levies on parents beyond the government-funded hours entitlement.

In a strict regulatory sense, providers registered with a local authority to deliver funded hours are not permitted to charge parents a direct top-up on those funded sessions — that is, they cannot say "the government pays £6.50/hr but we charge £8.00/hr so you owe us £1.50 per funded hour". This is prohibited under the statutory guidance.

However, providers can legitimately charge for optional extras on funded hours days, including meals, snacks, nappies, sun cream and other consumables. They can also charge their standard private rate for any hours the child attends beyond their funded entitlement.

In practice, the line between permitted consumables charges and unlawful top-up fees is contested. Some providers set consumables charges at levels that effectively recover the difference between the funded rate and their private rate. The Competition and Markets Authority (CMA) has scrutinised this area.

Parents should check their provider's fee schedule carefully. If a nursery makes accessing funded hours conditional on purchasing extras, that may breach the regulations. Your local authority can investigate complaints.

The gap between funded rates and actual costs is the root cause. Where the EYNFF rate is lower than a provider's break-even point, financial pressure to recover costs through additional charges increases.