How to Set Your Fees Without Scaring Off Parents

As we approach the end of the year, it’s a good time to take a step back and review your finances. With the inevitable rise in staffing costs due next April — including increases to the National Living Wage and pensions — now is the time to start thinking about your budgets and, importantly, your fees.

Raising fees is one of the trickiest parts of running a childcare business. You know you need to keep your setting sustainable (which is hard when the vast majority of your income now comes from the funding entitlements) and ensure your team is fairly paid, but you also want to avoid putting off parents or damaging the trust you’ve worked hard to build. The good news is that with careful planning and communication, you can manage a fee review in a way that feels fair, transparent, and well-justified.

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1. Start with the Numbers

Before anything else, get a clear picture of your costs. Include:

• Staffing – salaries, training, and the projected rise next April.

• Consumables – food, nappies, resources, utilities, and maintenance.

• Rent or mortgage – and any expected increases.

• Contingencies – it’s wise to plan for the unexpected.

Once you’ve mapped out these figures, you can see what level of increase (if any) you truly need. It’s always better to base decisions on facts, not feelings.

Download my three year finance plan to help you with this.

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2. Benchmark Against Others

Research what other local nurseries, pre-schools and childminders are charging for comparable services. You don’t have to match them exactly, but this helps ensure you’re in the right range and can justify your prices as fair for your area.

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3. Be Transparent

Parents are more understanding when they know why you’re increasing fees. Communicate early, clearly, and with honesty.

For example, you might say:

“We’ve held our fees steady for the past 18 months, but with rising staffing and utility costs, we need to make a small increase to continue offering high-quality care.”

It helps to focus on what parents value most — quality, continuity of staff, and safety — and explain how your fees support that.

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4. Give Plenty of Notice

Avoid surprises. Aim to give parents at least 6–8 weeks’ notice of any fee change. This gives them time to budget and reduces the risk of resentment or shock.

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5. Offer Options Where Possible

If a straight increase feels daunting, consider:

• Introducing different session lengths or packages.

• Introduce a stepped increase if you need to increase your hourly rate significantly.

• Rewarding loyalty (e.g. a small discount for siblings).

• Reviewing whether funded hours are balanced properly against private hours.

Sometimes flexibility can ease the impact while still improving sustainability.

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6. Communicate the Value You Offer

Parents aren’t just buying “childcare hours” — they’re investing in their child’s development and wellbeing. Use newsletters, displays, and social media to showcase what makes your setting special: your curriculum, your staff’s qualifications, your warm environment, your partnerships with families. When parents see the value, the fee increase feels more justified.

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7. Review Regularly — Don’t Leave It Too Late

Too many settings wait until financial pressure forces a big jump. Instead, review fees at least annually. Smaller, planned increases are easier for parents to manage and for you to explain.

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Final Thoughts

Now is the time to review your finances and plan ahead for the next year’s staffing costs. Setting your fees thoughtfully ensures you can continue offering excellent care while paying your team fairly and keeping your business strong.

Transparent communication, realistic budgeting, and confidence in the value you provide will help you set your fees without scaring off parents — and head into the new year with clarity and stability.

Need help with getting to grips with your finances? Register your interest for my Knowing Your Numbers Workshop here.