Childcare Under Pressure: Funding Freeze and Rising Costs Challenge Working Families

Introduction: A Critical Moment for Childcare

Childcare has emerged as one of the most pressing issues facing working families in 2026, with developments on both sides of the Atlantic highlighting the fragility of childcare systems. The Trump administration has frozen federal childcare funding to all 50 states, plus the District of Columbia and U.S. territories, while the UK continues to grapple with some of the world’s highest childcare costs. These challenges underscore the critical importance of accessible, affordable childcare for economic stability and family wellbeing.

Federal Funding Freeze Creates Uncertainty

In a dramatic move that has sent shockwaves through communities across America, the Department of Health and Human Services says it’ll only restore federal grants under the Child Care and Development Fund to states that provide more verification and administrative data about the funds they receive. This action comes as Minnesota receives about $185 million annually in federal child care funding, supporting care for 19,000 children, according to the US Department of Health and Human Services. The freeze has left thousands of families uncertain about their childcare arrangements, with the state saying the money helps cover the cost of routine child care for thousands of low-income families each month, allowing parents to work or attend school.

UK Families Face Mounting Costs

Meanwhile, British families continue to struggle with eye-watering childcare expenses. In 2024, the average weekly cost of a full-time nursery place in Great Britain was 302.10 British pounds for under twos, 288.13 pounds for two-year-olds, and 120.93 pounds for those aged between three and four. This means that on average, parents are paying about £1,240 a month or almost £15,000 a year for a full-time nursery place for one child. The situation is particularly acute in the capital, where the average cost of full-time childcare at nurseries in inner London was over 428 British pounds a week for children under two in 2024.

Impact on Working Parents and the Economy

The childcare crisis disproportionately affects women and mothers. According to a survey of 27,000 parents by Pregnant Then Screwed, childcare costs had forced 43% of mothers to consider leaving their jobs and 40% to work fewer hours. NBC reports that working moms are leaving the workforce due to rising child care costs and shifting work policies. This exodus of mothers from employment has broader economic implications, reducing household incomes and limiting career progression for women.

Looking Ahead: Urgent Need for Solutions

As 2026 progresses, the childcare situation remains precarious. In a year marked by turbulence and unpredictability for both federal policy and the federal civil service, the good news is that many of the core federal early education programs are well-positioned to at least receive level funding for FY26. However, many states, such as New Mexico, Connecticut, and New Jersey continue to make important progress towards increasing access to affordable, high-quality child care despite a lack of momentum at the federal level. For families on both sides of the Atlantic, the message is clear: childcare is not merely a personal concern but a fundamental infrastructure issue that demands urgent policy attention and investment to support working families and economic growth.