What Funded Childcare Hours Are Actually Worth, by Age
5 min read. Last verified 30 June 2026. 2026/27 rules.
The short answer
Funded hours are valued using the Department for Education's national average hourly funding rate for each age band, which is higher for younger children: around £10.91 an hour for ages 9 months to 3 years, and around £6.60 an hour for ages 3 to 4. The same 30-hour, 38-week entitlement is therefore worth more for a younger child.
Key facts
›The funded-hours entitlement is up to 30 hours a week, for 38 weeks of the year, for eligible working parents.
›DfE national average funding rates differ by age: roughly £10.91/hour for the 9-months-to-3-years band, £6.60/hour for the 3-to-4-years band.
›A child under 9 months or already at school age (5+) has no funded-hours entitlement under this scheme.
›The cash value of losing funded hours, on top of Tax-Free Childcare, is what makes the £100k childcare cliff worth more than the tax-only figure suggests.
Funded hours are usually described only as a number of hours, which hides how much they are actually worth in cash, and why that value changes as a child gets older.
Why the rate depends on age
The government does not pay childcare providers a flat rate per funded hour. The Department for Education sets national average hourly funding rates by age band, reflecting the higher staffing ratios needed for younger children. Babies and toddlers cost providers more to look after per hour than three and four year olds, and the funding rate follows that cost.
The bands that matter for the £100k cliff
›Under 9 months: no funded-hours entitlement under the working-parents scheme.
›9 months to 3 years: the working-parents entitlement, funded at the highest hourly rate of the bands that qualify.
›3 to 4 years: the entitlement continues, funded at a lower hourly rate than the younger band.
›5 and over (school age): no funded-hours entitlement under this scheme.
Why this matters for the £100,000 decision
When weighing whether to take a bonus, a pay rise, or hold RSUs that might vest you over £100,000, the funded-hours value lost is highest while a child is youngest. A family with a baby approaching the funded-hours age range stands to lose more from crossing the cliff than the same family will once that child reaches school age, even before counting Tax-Free Childcare on top.
›Multiple children in the funded-hours age range multiply the lost value, since the entitlement and its loss apply per child.
›Combine the funded-hours value with Tax-Free Childcare's up-to-£2,000-per-child top-up to see the full childcare cost of crossing £100,000, not just the tax cost.
Common questions
Are funded hours worth the same amount whatever a child's age?
No. The entitlement is the same number of hours, but the Department for Education funds providers at a higher national average hourly rate for younger children (roughly 9 months to 3 years) than for the 3-to-4-years band, so the cash value differs by age.
Do children under 9 months or over school age get funded hours under this scheme?
No. The working-parents funded-hours entitlement applies from 9 months to 4 years old; children younger or already at school age have no entitlement under this particular scheme.
Figures verified against gov.uk and gov.scot on 30 June 2026. Constants version 2026/27.3. 2026/27 tax year. This is a modelling tool for general insight, not financial or tax advice.
We use PostHog analytics to understand how the tool is used. No financial data is shared. Privacy Policy