Government Fiscal Changes and Nursery Fees

In recent months, the UK government has increased National Insurance contributions, a move designed to boost public finances. However, these changes have had a ripple effect on the childcare industry. As NI costs rise, nurseries – many of which operate on tight profit margins – have little choice but to pass these additional expenses on to parents with higher fees.

According to a recent survey by the National Day Nurseries Association (NDNA), NI increases are now one of the most significant drivers behind the current spike in nursery fees. You can read more about their findings here.

The Impact on the Early Years Sector

Nurseries face a challenging balancing act: they must maintain high standards of care while managing rising operational costs. With wages accounting for between 60-70% of their turnover, even a modest increase in NI contributions can have a considerable impact on overall expenses. As well as wages, the UK economy has seen significant increases in operational costs such as utilities, food and corporation taxes. As a result, many private nurseries have no option but to adjust their fees to keep their services sustainable.

Regional Price Overview

The impact of these fiscal changes is felt across different regions, though the extent of fee increases can vary. So what average fees should you expect in your region for under 2s?

Scotland

• Edinburgh (£81 per day): Fee increases have been consistent in 2025, as many private nurseries adjust their pricing structures to cope with increased operational costs. Edinburgh also suffers from a particular imbalanceof over-demand for a limited number of spaces.
• Glasgow (£75 per day): Similar trends are evident in Glasgow to Edinburgh however not as extreme given the better supply of nurseries available. Glasgow has seen an increased demand of suburban nursery settings however, as the City Centre continues to struggle with less of the economy working from offices located centrally.
• Aberdeen (£74 per day): Modist increases have been seen but with the energy sector dominating the economy in Aberdeen, prices have always been higher than most regions north of the central belt.
• Rest of Scotland (£66 per day): Overall trends point towards increases but these may be more gradual than the central belt given the lower wage costs to businesses. Expect to see fee increases over the next 12-24 months.

England

• London (£117 per day): In London, where nursery fees are already among the highest in the country, the additional fiscal pressures mean that some nurseries have introduced further increases. The competitive market means providers are also striving to offer enhanced services, which can compound the rising costs.
• Manchester & Liverpool (£68 per day): With the fastest-growing economy in the UK as of January 2025, it is not a surprise that nurseries in the Manchester and Liverpool areas are also seeing an increase in demand. This demand, coupled with the NI changes and the popularity of the North West as a place to raise a family, we are starting to see increases in line with major cities rather than regions.
• Birmingham (£79 per day): Birmingham is witnessing similar patterns. With the 2nd largest city popular in the UK, Birmingham private nurseries are adjusting fees to reflect the higher wage costs driven by NI increases, with many parents reporting noticeable changes.
• North East (£82 per day): While fees in the North East have traditionally been lower than in London, recent fiscal pressures are leading to modest increases. Here, providers are keen to balance affordability with the need to sustain quality care.

Wales

• Cardiff (£71 per day): Cardiff enjoys a relatively moderate cost of living compared to many major UK cities but some industry experts report that childcare costs in the city are becoming unbalanced with household incomes.
• Rest of Wales (£65 per day): Much like central and northern Scotland, outside of Cardiff, nursery fees have remained consistently low in comparison to Cardiff. In conjunction with this, Wales continues to offer several government support schemes, including initiatives like the Flying Start programme, which targets early years support in disadvantaged areas.

What This Means for Parents

The rise in nursery fees can be a source of stress, but understanding the reasons behind these increases can help parents navigate the landscape more effectively. While government support schemes such as Tax-Free Childcare, Universal Credit, and funded hours remain critical resources, it’s important to factor in the impact of recent NI changes when budgeting for childcare costs.

If you’re feeling the pinch of rising fees, consider:

• Reviewing all available government support options.
• Discussing fee structures with your nursery to understand how these changes might affect your specific circumstances.
• Explore flexibilities with your employer to help reduce your childcare costs
• Explore alternative childcare arrangements that might offer better value without compromising on quality.

A Note From Nuuri Founder & CEO

"In today’s challenging economic climate, rising nursery fees are becoming a significant concern for parents across the UK. With government policies such as increased National Insurance contributions and other fiscal pressures driving up operating costs, many nurseries are forced to adjust their fees—often passing those increases on to families. At Nuuri, we recognise that the strain on household budgets can be overwhelming. That's why our platform is designed to simplify the nursery enrolment process, making it easier and more transparent for parents to navigate and access the best care options available.

We are also committed to working alongside nurseries across the UK to ensure that local councils and governments understand the considerable pressures current economic policies are placing on the early years sector. By streamlining application processes, enhancing transparency, and advocating for the needs of both families and childcare providers, we aim to support the community and ensure that quality early years care remains accessible, even as these challenges continue."

For more detailed advice on managing nursery fees, cost calculator and navigating government support, visit our Nuuri Advice Hub.