The Hub
Early Years Funding
Early years funding supports the national scheme administered by local authorities to offer free early learning and childcare places to all three, four and eligible two year olds. On this page you will be able to find out about the agreed funding rates for two, three and four years olds and Early Years Pupil Premium.
The 2026-27 indicative hourly rates can be found at the following link
Under two, two, three and four year old's free early education
What is it?
Every eligible under 2, 2, 3, and 4 year old child is entitled to up to 1,440 hours of free early education each year, which must be taken over a minimum of 38 weeks, equating to 15/30 hours per week
Each Free Early Education session must be a maximum of 10 hours long
Children must attend the setting for a minimum of two days per week to receive their full entitlement. Should parents/carers require childcare for additional hours, the provider can charge for this. The majority of parents/carers who require only the Free Early Education Entitlement access it through their local nursery school or pre-school, although some full day-care providers do offer this service. FEEE approved providers include:
- Nursery classes in primary schools
- Nursery schools
- Pre-schools or playgroups
- Private nurseries
- Childminders
You can register to offer the Free Entitlement here.
Under two, two, three and four year old's funding levels
Schools Forum were provided with reports in October 2025, December 2025 and February 2026 which set out the rationale and recommendations for the 2026/27 Early Years Funding Formula (EYFF) and agreed in February 2026 that the funding for 2026/27 would be based on the following:
- a universal base rate for all types of provider
- a supplementary funding rate for maintained nursery schools
- deprivation payments to be made across IDACI bands 1 to 6, with a higher payment weighting for IDACI bands 4-6 for the 3 & 4-year-old funding entitlement
- 5.25 per cent of the total Early Years budget for 3 and 4 year old's to be allocated to the following supplements: Quality Supplement (previously Teacher Pay and Pension Grant): 2.1 per cent and Deprivation Supplement: 3.0 per cent. In addition, 0.1 per cent will be allocated for systems leadership. This funding will be applied to the 3 and 4-year-old, 2-year-old, and under 2-year-old funding streams.
Therefore in 2026-27 Schools Forum agreed Early Years providers will receive:
The hourly funding rate for eligible children under the age of two will be £11.97 across all provider types. -
The hourly funding rate for eligible two-year-old children will be £8.78 across all provider types.
Three and four year old funding made up of:
- A base rate of £5.88 per hour for all providers
- The Maintained Nursery Schools supplement - £5.47 per hour, including £0.48 per hour in respect of the Teacher Pay And Pension Grant (TPPG) which is now incorporated within the overall supplement rate.
- Deprivation supplements - IDACI band payments will be paid per hour where eligible at the following levels: Band 1 £0.25 per hour; Band 2 £0.50 per hour; Band 3 £0.85 per hour; Band 4 £1.60 per hour; Band 5 £2.25 per hour; and Band 6 £2.70 per hour.
Appendix F and G of the Schools Forum paper presented on 11 February outlined the indicative budgets for 2026-27 for all Early Years providers.
Eligibility criteria for two year old FEEE and 30hrs FEEE can be found on the Early Years Eligibility Checker page.
Early Years Pupil Premium Funding
The Early Years Pupil Premium (EYPP) provides additional funding to early years providers to support disadvantaged children and improve their educational outcomes. It applies to eligible children accessing funded early education places.
Providers receive £1.15 per hour attended by the eligible child (totaling £655.50 per year). It applies to children in a free early education place from April 2026.
The EYPP is child-specific in addition to the standard hourly rate for under two, two and three and four year olds (detailed above). Hours must be reported via the headcount returns through the Early Years Provider Portal. To ensure providers receive their EYPP payments in a timely manner, they will receive an interim payment mid-term which will be reconciled at the end of the term and any balancing payments will be made in the following term (in February for Autumn term, in May for Spring term and October for Summer term.
Responsibilities of Early Years providers
Early years providers are responsible for:
- Identifying which children may be eligible for the EYPP; and
- Passing that information on to the local authority via the Headcount returns.
EYPP eligibility criteria can be found on the Early Years Eligibility Checker page.
Providers should encourage parents to provide and record their NI numbers and date of birth at the point of registration in order to assess children for EYPP eligibility via the Early Years Provider Portal, as the portal is GDPR compliant and will securely store this data). A detailed Step by Step guide on how to assess children for EYPP eligibility can be found in the “User Guide” section on the Hub using the following link. Embedding eligibility checks within the routine admissions process ensures that parents and carers are not stigmatised, while helping providers identify all eligible children and secure the additional funding to which they are entitled.
Deprivation Supplement Funding
Deprivation Supplement Funding payments are based on children’s postcode data submitted by settings. Deprivation supplement funding is NOT child specific and can be used to support any disadvantaged or vulnerable child or children with SEND who are taking up their Free Early Education Entitlement at your setting.
Deprivation supplement funding can be used by your school/setting throughout the year to close the gap between the attainment of the most disadvantaged children and their peers.
Full details regarding deprivation funding is outlined in the FEEE Financial Guidance.
Free Early Education Material
Free childcare digital leaflet