Business Outlook 2026 | Childcare & Education

2025 was a year of transformational change across the UK’s childcare and education sectors.

We experienced an incredibly active market, largely fuelled by an increase in longer-established businesses with solid earnings being put up for sale for the first time – a common trend that has emerged due to recent tax reforms, which prompted owners to sell.

Fiscal and legislative shifts, teamed with changing sector dynamics, have also led some operators to reshape their acquisition strategies into derisking strategies, selectively buying complementary businesses to protect and diversify forward-looking revenues.

Activity has been seen across all corners of the UK and from a range of buyer types – from new entrants through to small and medium-sized regional groups. Larger corporate buyers have largely engaged in very competitive bidding for the most sought-after acquisition opportunities.

Despite wider geopolitical and economic considerations, the UK childcare and education sectors continue to draw interest from international trade buyers and investors. With these businesses offering scope for further innovation and consolidation, teamed with their ESG credentials appeal, buyer and investor appetite has remained strong for high-quality businesses that evidence solid and stable earnings.

From an operational perspective, the past year has brought challenges, with business owners having to deal with increased Employer National Insurance contributions, wage increases, energy and other operational cost inflations, which, for many, have led to higher operational cost margins. Some businesses have been able to offset these costs through occupancy growth and associated revenues, enabling sustainment and, in some cases, improvements in earnings.