Childcare costs rise at twice the rate of inflation

The cost of childcare has risen well above the rate of inflation, according to the Daycare Trust’s ninth annual childcare costs survey.

The trust found England worst hit, with the cost of a nursery place for a child over two years old having risen by 5.1% – almost double inflation. All types of childcare are now more expensive in England, although Scotland and Wales saw a fall in the cost of out-of-school care.

What the Daycare Trust thinks the government should do…

  • Sustain and build upon investment in childcare and early years provision
  • Increase the proportion of help with childcare costs to 100% through tax credits
  • Extend the provision of entitlement to free childcare all two, three and four-year-olds
  • Increase provision of out-of-school childcare
  • Provide subsidised, ultimately free, out-of-school activities for all school-age children
  • Conduct a national evaluation of 2011 childcare sufficiency assessments for England and Wales.
  • Chief executive Alison Garnham said: “Daycare Trust is calling for the maximum proportion of childcare costs the poorest parents can claim through tax credits to be increased from 80% to 100%, and for the free entitlement to be extended. We would also urge all parents to check that they are claiming all the help they are entitled to.”
Annual care for a two-year-old now costs on average £4,576 for parents in England, £4,368 for parents in Scotland, and £4,056 for parents in Wales, based on 25 hours nursery care per week. Parents in London facing the highest reported costs face paying up to £11,050 per year for 25 hours’ childcare per week, or £22,100 for 50 hours.

According to the survey, an average parent in England working part-time can expect to spend more than half their gross earnings on a nursery place for their under-two-year-old.

And more than half (58%) of Family Information Services (69% in Wales) reported that parents have indicated a lack of childcare. Half of all local authorities reporting insufficient childcare for older children and disabled children.

Kate Goddard, senior research and policy officer, Daycare Trust, said: “We recognise childcare does cost a lot to provide, especially high quality childcare, but the problem at the moment is that the majority of that cost is passed to parents.”

HR chiefs have already warned that scrapping childcare voucher schemes will lead to a widening of the gender pay gap – the increasing cost of childcare will serve only to worsen it.

What working mothers say…

  • “As this report suggests, private nurseries fared well in the recession – as parents have been forced back into the workplace, and for longer hours, so the need for childcare provision for pre-school children has increased. The government’s u-turn on the abolition of the salary sacrifice/childcare vouchers scheme shows some willingness on its part to help with childcare costs, but there is still a long way to go to ensure that the financial benefits of going to work outweigh the cost of childcare.”

    Lindsey Farrelly and Ann Davies, founders, Working Mothers in Business Networking Group

  • “With childcare costing what it does, many people have to weigh up whether it is worth going back to work or not. But it is also a question of finding good quality childcare and in some cases joining a waiting list – all of which is added pressure for the parents. Higher standards in childcare, more availability and subsidised costs would be a big leap forwards.”

    Denise Tyler, founder, Mother@work

  • “This rise in childcare costs comes at a time when parents in the UK are tightening their belts, and when Britain already has the highest childcare costs in Europe. The cost of childcare and its availability are regularly cited in our own annual surveys as being among the three major barriers to women returning to work. It is absolutely vital that substantially more is done to improve it if employers are not to lose out on the experience and skills that many working mums offer.”

    Gillian Nissim, founder, Workingmums.co.uk

 

 

 

 

 

 

 

About the survey

The annual childcare costs survey is compiled from figures submitted by Family Information Services in England, Scotland and Wales. It examines by region the cost of childminders, nurseries and after-school club provision based on 25 hours’ use a week (or 15 hours for after-school clubs).

Daycare Trust has been working since 1986 to promote high-quality affordable childcare for all.

 

 

 

 

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