Cost of childcare for young children has risen more than four times faster than wages since 2008, shows research

Most working parents with one-year-olds get no state help with childcare costs

May Bulman
Social Affairs Correspondent
Friday 20 October 2017 01:46
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While the Government provides support for childcare for children aged two and older, most working parents with one-year-olds do not get any state help with childcare costs
While the Government provides support for childcare for children aged two and older, most working parents with one-year-olds do not get any state help with childcare costs

The cost of childcare for young children has risen more than four times faster than wages since 2008, research shows.

New analysis published by the Trades Union Congress (TUC) reveals that in England the average wages of those with a one-year-old child rose by 12 per cent in cash terms between 2008 and 2016, while their childcare costs shot up by 48 per cent in the same period.

In some parts of the UK the cost of childcare has risen by even more, increasing 7.4 times more quickly than pay in London, seven times more quickly in the East Midlands and 4.8 times more in West Midlands.

While the Government provides some support for childcare for children aged two and older, most working parents with one-year-olds do not get any state help with childcare costs.

With around 950,000 working parents across the UK with a child aged one, the TUC warns that these rising costs have huge implications for family budgets, as parents are spending an increasing portion of their pay on childcare.

The analysis shows that a single parent working full-time with a one-year-old in nursery for 21 hours a week spent more than a fifth (21 per cent) of their wages on childcare in 2016, up from around a sixth (17 per cent) in 2008.

Meanwhile, households with one parent working full-time and one parent working part-time with a one-year-old in nursery for 21 hours a week spent a seventh (14 per cent) of their salary on childcare in 2016, up from around a 10th (11 per cent) in 2008.

Pressure is even greater on parents working full-time, especially single parents, with a single mum or dad with a young child in nursery for 40 hours a week needing to spend two-fifths (40 per cent) of their pay on childcare.

TUC general secretary Frances O’Grady said that “eye-watering” childcare bills and comparatively slow wage rises meant mothers had to make a choice between having a family or a career, and urged for subsidised and affordable childcare.

“The cost of childcare is spiralling but wages aren’t keeping pace. Parents are spending more and more of their salaries on childcare, and the picture is even worse for single parents,” she said.

“Nearly a million working parents with one-year-old kids have eye-watering childcare bills. There is a real gap in childcare support for one-year-olds until government assistance kicks in at age two.

“Parents need subsidised, affordable childcare from as soon as maternity leave finishes to enable them to continue working, and so mums don’t continue to have to make that choice between having a family and a career.”

It comes after the Government was accused of failing to fund their own pledge to provide 30-hours free childcare for three and four-year-olds, with ministers having admitted “teething problems” with implementing the policy.

Some nurseries have claimed the funding allocated for the plan does not cover the true cost of providing the extra hours.

Ellen Broomé, chief executive at the Family and Childcare Trust, meanwhile said: “Childcare is as vital as the rails and roads to making our country run: it boosts children’s outcomes, supports parents to work and provides our economy with a reliable workforce.

“For too many parents, however, high childcare costs mean that it does not pay to work. Low-income families claiming Universal Credit typically take home just £1.96 per hour after childcare costs have been paid, and some get even less than this. We must make sure every parent is better off working after childcare costs.”

To address this increasing pressure on working families, the TUC is calling for universal free childcare from the end of maternity leave, which it argues would help single parents and families stay in work and progress their careers after having children.

It is also urging for more government funding for local authorities to provide nurseries and child care, and a greater role for employers in funding childcare - either through direct subsidy to employees or the provision of on-site childcare facilities.

Responding to the findings, children and families minister Robert Goodwill said: “Helping families access affordable childcare is at the heart of this government’s agenda, which is why we are investing a record £6bn every year by 2020 in childcare.

“As well as providing tax-free childcare to around 2 million households to help pay for childcare costs, we have doubled the free childcare available to working parents of three and four years olds to 30 hours a week, saving them thousands a year and helping them get back into work.

"Indeed, an independent evaluation of the early delivery of 30 hours free childcare found that 84 per cent of parents reported improved family finances as a result of the free childcare.”

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