Supporting parents financially

Advice for early years and childcare settings on how to support parents with childcare costs.

How settings can help

Early years and childcare settings play an important role in supporting families. A safe and welcoming environment helps parents feel comfortable discussing financial difficulties and finding support.

By identifying financial difficulties early and having clear processes in place, you can help parents manage childcare costs and reduce the risk of unpaid fees.

You do not need to provide debt or benefits advice. Instead, you should:

  • make childcare costs clear
  • signpost parents to trusted sources of support
  • help eligible children access their Early Years Funded Entitlement (EYFE)

Unpaid fees can affect your cash flow and the long-term sustainability of your business. A clear written fee policy benefits both your setting and the families you support.

Taking a proactive approach

Managing payments and preventing debt

Help families avoid financial difficulties by making your payment and funding arrangements clear from the start. Set out all charges, payment terms and funding information in your fee policy.

Make sure you:

  • issue clear and accurate invoices on time
  • use email or childcare software where possible so both you and parents have a record
  • itemise invoices, showing Early Years Funded Entitlement (EYFE) hours as free and listing any paid-for additional hours and optional charges separately
  • include payment dates, payment methods and bank details in writing
  • send reminders before payments are due and follow up missed payments promptly
  • give parents reasonable notice of fee changes and explain:
    • what is changing
    • when the changes will take effect
    • who they can contact if they have concerns

Late and non-payment process

You should have a clear process for managing late or missed payments. Your fee policy should explain the steps you will take to encourage payment and prevent families from building up further debt.

This process could include:

  • sending payment reminders
  • discussing a payment plan
  • reviewing paid-for additional hours
  • pausing extra sessions until outstanding payments are managed

You should also have a clear policy explaining what happens if a child is collected late, including any charges that apply.

Additional sessions

Ask parents to pay for additional sessions in advance. If a parent already has outstanding fees, do not agree to further additional sessions until they have paid the balance or agreed a payment plan.

Families experiencing financial difficulties

If a family is struggling to pay for additional hours or chargeable extras and they are eligible for the Early Years Funded Entitlements, consider reducing their place to funded hours only, where appropriate.

You should also offer reasonable alternatives to chargeable extras so the family can continue to access their funded entitlement free of charge.

Keep funded hours separate from any unpaid private fees.

Information about financial support

Help families access support by sharing information about financial assistance. You can do this through:

  • posters
  • leaflets
  • newsletters

Signs that families may be struggling financially

Some signs may suggest that a family is struggling financially or may face financial difficulties in the future.

These signs can include:

  • poor physical or mental health
  • clothing that is unwashed, worn out or no longer fits the child (this may indicate financial difficulties or neglect)
  • parental separation
  • involvement in family court proceedings
  • childcare fees being paid late or missed, particularly if this is a sudden change
  • a child saying their family is struggling financially, for example that they have missed meals or cannot afford new shoes
  • a parent saying that childcare costs or other household expenses are becoming difficult to manage

If you are concerned about neglect or a child's welfare, follow your safeguarding procedures. For more information, visit the West Sussex Safeguarding Children Partnership (WSCP) Neglect Tools and Resources page.

Steps to take to support families

If you think a family may be struggling financially, arrange a conversation in a private and welcoming space. Early conversations can help prevent debt from increasing.

Money can be a sensitive topic. Some families may also find these conversations difficult because of cultural or religious beliefs.

Ask open questions to understand what support the family may need. Do not pressure parents or carers to share personal financial information.

You can offer support by:

  • checking that invoices are correct and clearly explaining what is owed
  • signposting families to local support organisations
  • offering a short-term payment plan, where this is possible in your setting
  • signposting families to qualified debt, benefits and budgeting advice through the Family Services Directory
  • working with local authorities, health services and other agencies when early help or safeguarding support is needed
  • signposting families to local or private grants, where appropriate
  • sharing information about help with energy bills and wider cost of living support
  • reviewing optional costs for nursery activities, events, meals and consumables and looking for ways to reduce or remove them
  • organising clothes, toy and book swaps, or second-hand sales
  • suggesting free or low-cost activities for families
  • helping eligible families with children under 4 access Healthy Start food vouchers

Signposting suggestions

Useful national and local resources include: