These are uncertain times for those running child care facilities and nurseries. Many more are entering insolvency because of lower occupancy rates and government data from June showed that some 2,500 providers had been lost since the start of 2021.

Childcare will remain essential for some who are required to away from home, but changing and more less rigid work patterns mean that there is less need. Some parents may now search for alternatives to dropping off children at childcare centres and instead choose to employ childminders or nannies which may be open to working more flexibly.

It is possible that the government may provide more support to the sector by extending early entitlement funding support, but there are no guarantees and if numbers of children attending do not recover, then further failures are inevitable.

Here at Company Debt, we have significant experience in both closing and restructuring childcare businesses. Get in touch for a free, no obligation discussion about your situation with one of our licensed insolvency practitioners.

Childcare Pressure Points

Insolvency & Rescue Solutions for the Childcare Sector

What are the Reasons for Care Home Insolvency?

Childcare facilities will be affected by the rise in the national living wage and the fact this eligibility or this is now at age 23 – previously it was 25. They will also need to look at their staffing situations as furlough ends and employers will need to decide whether employees can be retained or made redundant.

It’s been reported that morale is low in the sector, with businesses needing to remain open during lockdowns for vulnerable children and those of key workers, and subsequent concern over job losses and financial viability. Those owning childcare businesses may have taken out government loans earlier during the pandemic, however they may now be in worse financial position and accrued other debts including to HMRC which will seek to take enforcement action.

Certainly in areas where many parents needed external childcare, there could be now be oversupply and this will mean there could well be more closures or business sales to create critical mass.

We are fully aware that insolvency processes with respect to carehomes will impact not just directors but the elderly residents themselves. In some cases, processes such as administration can result in the sale of a care home to a third party, minimising the disruption for vulnerable residents

Directors Redundancy

Many directors don’t realise they may be eligible for redundancy payments when closing an insolvent business. Assuming you’ve worked for your business for at least 16 hours per week over a two year period, and are registered for PAYE, it is more than likely you’ll have a redundancy claim. We will apply for this on your behalf, as part of the liquidation process.

Insolvency & Rescue Solutions for the Childcare Sector

Knowledge – Insight – Solutions

We are fully licensed and accredited insolvency practitioners based in north London, and with decades of combined partner experience in helping directors find positive solutions to business challenges.

Our goal is first to understand your situation as fully as we can, and then to explain the range of options available to you.

We focus on practical advice, without jargon. We practice total transparency around costs and fee structures. Our wish is to support you as fully as possible so that you can emerge from this situation in the best possible situation.

As a first step, simply book in a call with one of our team to learn more about our approach, and to take advantage of a fee consultation that carries no obligation.

Book My Consultation

If you need an experienced insolvency practitioner or business rescue specialist, seek advice now.

  • Your free consultation will be led by one of our experienced London insolvency practitioners
  • You can speak via phone, online meeting or in person so that we can listen carefully to the facts about your situation
  • The team will provide a preliminary view of the likely best outcome, proposed strategy, and the likely cost
  • We specialise in helping limited company directors needing immediate professional debt advice


  • This field is for validation purposes and should be left unchanged.