Nursery top-up fees: Are they legal?

Nurseries charging top-up fees look set to increase

England, Scotland, Wales and Northern Ireland all offer government-funded childcare hours, with some nurseries charging top-up fees on top of these ‘free’ hours, for extras such as food, activities and nappies.

The number of nurseries charging top-up fees looks set to increase, due to England expanding its government-funded childcare scheme, with working parents of children from the age of nine months now able to access ‘free’ childcare.

A recent survey by the Early Years Alliance found if the government fails to address the financial pressures on nurseries in England, 87% are likely to introduce or increase charges for optional extras such as meals, consumables and trips.

What are nursery top-up fees?

Top-up fees are extra charges nurseries ask parents to pay on top of the government-funded childcare hours.

Nurseries charge these top-up fees because they say government funding only covers the actual childcare not ‘optional extras’ like meals, nappies and activities.

Some nurseries call top-up fees a ‘supplementary fee’ or ‘parental contribution’.

Nursery top-up fees in England

The government has said nurseries in England are within their rights to charge for things like nappies, wipes, food and other ‘consumables’.

However these extra consumable charges are not allowed to be ‘a condition of accessing a funded place’.

The Early Education and Childcare Statutory Guidance for Local Authorities April 2023 states providers can ‘charge for meals and snacks as part of a free entitlement place and that they can also charge for consumables such as nappies or sun cream, and for services such as trips and specialist tuition. Parents can therefore be expected to pay for these, although these charges must be voluntary for the parent’.

Nurseries must be completely transparent about any additional charges.

In February 2025, the Department for Education (DfE) issued guidance recommending that nurseries give parents Parental Declaration Forms which include information on how much they charge for consumables and additional hours or services.

This would enable parents to clearly see what they are being asked to pay for in addition to their funded hours.

Nursery top-up fees in Scotland

Children accessing 1140 hours of Early Learning and Childcare (ELC) are entitled to either lunch or light tea at no additional cost to their parents.

The Scottish government says that any costs for parents using ELC should be optional and they should only be charged for additional snacks or the cost for outings that you have to pay extra for such as a trip to the theatre.

Nursery top-up fees in Wales

In Wales, nurseries are not allowed to charge hourly top-up rates if they normally charge over £5 an hour. Nurseries that breach these terms may lose their Childcare Offer funding.

Nurseries that charge parents claiming the Childcare Offer extra for meals must make it clear what the charge is for. If parents paying private nursery fees are allowed to provide packed lunches, then parents receiving the Childcare Offer must also be allowed to do this.

If you normally allow parents to provide packed lunches for their children, parents accessing the Offer must also be allowed to do so.

In a full day nursery session of around 10 hours, parents should not be charged over £9 for meals.  This charge would include:

• 3 meals at £2.50 per meal
• 2 snacks costing 75p per snack

Nurseries are also allowed to charge parents for activities that take place outside the nursery but these should be ‘occasional and exceptional’ and parents using the Childcare Offer should be able to opt out of them.

Nurseries are not allowed to charge extra to Childcare Offer parents for routine activities taking place within the nursery.

How much government funding do nurseries get?

In 2024/25 the national average hourly funding rate for nurseries in England is £11.22 per hour for children under the age of two.

For two-year-olds, they get £8.28 per hour and nurseries receive £5.88 per hour for three and four-year-olds.

In 2024/25 nurseries in Wales should get £5 per child.

In Scotland, the funding rate for children aged between 3-5 ranges from £6.11 to £7.48.

Government is taking action on ‘high additional charges’

The government in England wants to ensure the government funded childcare hours are ‘accessible and affordable for all families that need them’.

This is why it has pledged to take action ‘to tackle reported instances of parents facing very high additional charges on top of the funded entitlement hours’. 

Why do nurseries charge top-up fees?

1. Inadequate government funding

Many nurseries say the funding given by local authorities to pay for the ‘free’ quality childcare is not enough. The National Day Nurseries Association (NDNA) carried out a survey and found the average shortfall was £2.36 per hour per child for a 15 hour place. This means nurseries cannot afford to cover other costs such as nappies, meals and snacks

2. Rising operational costs

Nurseries are under a lot of financial pressures due to a rise in energy costs and staff costs as a result of a hike in the contributions employers pay for employees’ National Insurance. In April 2025, the minimum wage is also set to increase by nearly 7% putting extra financial pressure on nurseries.

3. Concerns over staying sustainable

Nurseries say if they are unable to charge top-up fees they would go out of business. “Every year we see that the largest proportion of closures happen in the most deprived areas. That’s because these nurseries are more dependent on government-funded hours and less on parent fees. That’s why we see evidence from several reports saying England is the worst place for childcare deserts,” says Purnima Tanuku, NDNA’s chief executive.

Ombudsman investigation into top-up fees

In 2023, Royal Borough of Windsor and Maidenhead Council was told by the Local Government and Social Care Ombudsman (LGSCO) to partially reimburse the fees a father paid while his daughter was receiving ‘free nursery care’, after it found it failed to ensure a nursery provider was providing transparent invoices.

The family paid private fees to the nursery and also claimed some ‘free’ childcare hours.

The father told the council he thought he was paying a ‘top-up fee’ as the nursery did not give him an itemised bill.

He complained to the Ombudsman after being dissatisfied with the response of the council.

The Ombudsman found the council had not worked with the provider to make sure its invoices were clear and transparent. It also found the nursery was applying a daily charge for consumables of more than £13, but failed to make parents aware this was an optional payment.

Paul Najsarek, Local Government and Social Care Ombudsman, said: “Statutory guidance is clear: councils should work with providers to ensure invoices and receipts are clear, transparent and itemised. We also made it clear in previous reports that ‘free must mean free’ and that nursery providers cannot bridge the gap between the council’s rate and their private rate by hiding charges in opaque bills and charging structures.

“As this man’s child has benefited from these consumables, I have asked the council to repay half of the fees paid out from the date he made the council aware of his concerns.”