What happens if my nursery or childminder closes?

Thousands of nurseries and childminders close in England each year, and a closure puts you in breach-of-contract territory with a provider that may have no money left. Speed decides how much you recover.

Getting the money back

Your contract is a consumer contract under the Consumer Rights Act 2015, and a provider that closes is in breach for any period it will not deliver. Suing a business with no assets rarely helps, which is why the card routes matter:

• Section 75 — if you paid by credit card and the transaction was between £100 and £30,000, the card issuer is jointly liable with the provider. Claim directly; the issuer cannot insist you pursue the closed nursery first.
• Chargeback — for debit card payments or amounts under £100, ask your bank to reverse the transaction under the card scheme rules, normally within 120 days.
• Small claims or a proof of debt in the insolvency, where the provider has assets. Parents rank as unsecured creditors.

This is the reason to pay monthly rather than take an annual prepayment discount: a year paid up front is a year at risk.

Funded hours and finding a place

Funded entitlement belongs to your child, not the provider. Contact the council's Family Information Service immediately: it should help you find a registered provider with capacity, reissue your funding code if needed, and redirect the payment. Section 6 of the Childcare Act 2006 imposes a sufficiency duty on councils to secure enough childcare for working parents, and a failure can be taken through the council's complaints process and then the Local Government and Social Care Ombudsman.

Provider conduct — sudden closure without notice, safeguarding failures, keeping fees in bad faith — is reported to Ofsted, which can suspend or cancel registration but cannot order you a refund. Tax-Free Childcare money stuck with a closed provider is dealt with by HMRC's childcare service helpline; a Universal Credit childcare claim should be stopped and restarted against the new provider.

If the closure leaves you unable to work, section 57A of the Employment Rights Act 1996 gives you the right to unpaid time off for dependants when childcare arrangements unexpectedly break down. And watch the warning signs in advance — repeated late staff payment, a slipping Ofsted rating, sudden ownership changes, deteriorating premises. Two or more, and it is worth lining up an alternative before you need it.