Expensive Child-care

The cost of childcare for young children in England has risen up to seven times faster than wages since 2008, TUC research shows.

childcare costs for parents with a one-year-old have soared by almost half (48%) over a period when their wages have fallen after adjusting for inflation, (rising by 12% in cash terms.)

The difference in the rate of increase was greatest in London, where childcare costs rose 7.4 times faster than pay between 2008 and 2016, and the East Midlands, where they rose seven times quicker. The smallest increase was in the east of England (35%), which saw childcare costs rise 2.9 times faster than wages since 2008.

Unlike parents with older children who have not started school, most of the 950,000 working parents with one-year-olds do not get any state help, meaning the costs are eating into their family budgets.

The TUC general secretary, Frances O’Grady, said: “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.

“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.

The union found 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%) of their wages on childcare last year. Where one parent was working full-time and the other part-time the figure was 14%, and for two parents working full-time it was 11%.

A single parent working full-time with a one-year-old child in nursery for 40 hours a week spent two-fifths (40%) of their salary on childcare last year.

 In each case the percentage was up on the equivalent 2008 figure.

 The Family and Childcare Trust (FCT), chief executive, Ellen Broomé explained: “For too many parents 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."

Purnima Tanuku, chief executive of the National Day Nurseries Association (NDNA), blamed the increase in costs on the government’s policy to extend “free” childcare for three and four-year-olds to 30 hours “without adequate investment”. She said: “Nurseries are left with a shortfall which can only be passed on to parents in the form of higher fees for paid-for hours.”