Addressing low pay is key if the Government wants to deliver on its early years ambitions

This blog post was first published in Nursery World on Monday 1 September 2025.

Today marks the rollout of the final stage of the Government’s expansion of the free childcare entitlement, with eligible working parents now able to access up to 30 free hours of early years provision per week for children aged 9 months and over.

Quantity of provision is not the only target in its sights, with key measures from the recent early years strategy also focused on improving the quality of education children receive in early years settings.

Where is the early years workforce in all this? A report published today by the National Foundation of Educational Research (NFER) provides some key insights into potential barriers to fulfilment of the Government’s early years ambitions by comparing the pay, characteristics and working conditions of early years workers to those of workers in other sectors who are similar in terms of their age, sex, region, highest qualification level and contracted working hours.

Our research shows that the sector is likely to meet the Government’s national target of recruiting 35,000 additional staff between 2023 and 2025 to meet the demand of the expanded entitlement. However, there is expected to be large regional variation in take-up patterns and therefore in the additional staff required.

The absence of region-level staff data means it is not possible to assess how consistently across regions demand will be met.

Moreover, a turnover rate of 16 per cent among staff in private, voluntary and independent settings (PVIs), which constitute over two-thirds of England’s childcare offer, indicates that recruitment and retention challenges are unlikely to disappear any time soon. Low pay has been identified by the sector as one of the key issues.

Our research finds that early years workers earned on average 36 per cent less than similar workers in other sectors (as of 2022/23).

The Government’s primary recruitment drive in the early years strategy is centred on degree-qualified early years teachers, citing evidence that they drive up quality of provision. Just one in 10 of the PVI workforce currently has a relevant qualification at this level, compared to nearly half of staff in school-based settings.

It is unlikely to be a coincidence that staff in school-based provision earn on average 14 per cent more per hour than those working in PVIs. Higher qualified staff can only be attracted and retained with higher levels of pay.

While the financial incentives the Government is offering to early years teachers will be warmly received, some of the highest earners in the early years workforce (likely to be the highest qualified) earn just £4 per hour above the minimum wage (as of 2023/24).

And while the average wage for an early years worker has increased in recent years, the gap between the highest and lowest earners remains largely unchanged. Only a third of lower qualified staff reported good career progression opportunities, likely indicating negative perceptions of both development and pay prospects.

In addition to bearing the brunt of the pay gap, higher qualified staff are more likely to be managers or deputy managers, juggling the volatility of early years demand and funding, which make settings vulnerable to closure.

Levels of anxiety among higher qualified staff are significantly higher than anxiety levels among both their coworkers and similar workers qualified to the same level in other sectors. We found similar trends across all other wellbeing measures. While higher qualified staff have the lowest turnover rates, rising stressors could challenge this trend.

We welcome the Government’s ambitions to improve the quality of early years provision and to raise the status of its workforce, but higher qualification levels demand higher pay.

While individual providers are responsible for setting the pay for early years workers, Government funding levels are the key determinant of the pay levels providers can afford because around 80% of pre-school childcare hours in England are state-funded. Provider budgets are already tight: less than half (47 per cent) of providers reported that their current income covered their costs.

We therefore urge the Government to continue increasing funding rates so that providers can offer competitive wages to recruit and retain staff, with a pay structure that rewards higher qualification levels and career progression.

The Government has successfully built a strong evidence base on the school teaching workforce and the same is needed for early years. Government must invest in upgrading the sources of early years workforce data and research.

This includes commissioning a large-scale survey of early years staff, analysing data on staff numbers at a regional level and undertaking research to understand the pressures on higher-qualified staff and how to address them.