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Early years funding rates for 2026/27

DfE's national average funding rates for 2026/27 are £12.04 an hour for under-2s, £8.90 for 2-year-olds and £6.61 for 3 and 4-year-olds. Councils pass at least 97% to providers.

The national averages

DfE's national average funding rates for 2026/27 are £12.04 an hour for under-2s, £8.90 for 2-year-olds and £6.61 for 3 and 4-year-olds. DfE calls them illustrative: each council is funded at its own rate and sets the rate it pays providers.

How early years funding reaches a nursery

  1. DfE

    Funds each council at its own hourly rate by age group. National averages:£12.04 · £8.90 · £6.61
  2. Council

    Sets the rate it pays providers and must pass on at least97%
  3. Nursery

    Receives the council's hourly rate, plus Early Years Pupil Premium of at least£1.15 an hour
Under-2s, 2-year-olds, and 3 and 4-year-olds, 2026/27. Sources: DfE, 2026 to 2027 early years national funding formulae technical note, and local authority funding operational guide 2026 to 2027.

Rises from 2025/26

The averages rose from £11.56 to £12.04 for under-2s, from £8.54 to £8.90 for 2-year-olds, and from £6.12 to £6.61 for 3 and 4-year-olds. The minimum share councils pass to providers rose from 96% to 97%.

Supplements

Early Years Pupil Premium is at least £1.15 an hour for eligible children, on the first 15 hours, and the Disability Access Fund at least £975 a child a year.

Rates in Greater Manchester

DfE's 2026/27 rate for under-2s is £12.66 an hour in Manchester and £11.18 in Stockport. Every borough's rates are on our Greater Manchester page.

How we help

We compare your cost per hour with your council's rates and plan the mix of funded and additional hours for each room. Try the nursery funding gap calculator.

Common questions

Does a nursery receive the national average rate?

No. The national averages are illustrative. DfE funds each council at its own rate, and each council sets the rate it pays providers.

How much of the funding must a council pass on?

At least 97% in 2026/27, up from 96%.

Related reading

Nursery funded hours and what you can charge parents

Free funded hours, voluntary extras and an itemised invoice.

Tax-Free Childcare for nurseries

The £2 top-up, the provider account and vouchers.

Ofsted registration when a nursery changes hands

Ofsted registration for the buyer, and the seller's responsibility until it resigns.

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