7 Sep 2011

Quarter of parents in debt over childcare

Almost a quarter of parents, regardless of income, say the cost of childcare in the UK has caused them to get into debt, a new study finds.

Parents spend almost a third of their incomes on childcare – more than anywhere else in the world, according to research by charities Save the Children and Daycare Trust.

For four out of 10 families, the cost of childcare is as much as their mortgage or rent.

The high cost is taking its toll, with 24 per cent of parents questioned in the survey saying they had been forced into debt to make ends meet.

The situation is even worse for families already living in poverty, where nearly half have had to cut back on food to afford childcare.

Childcare in the UK is amongst the most expensive in the world. Sally Copley, Save the Children

Sally Copley, head of poverty at Save the Children, said: “Childcare in the UK is amongst the most expensive in the world, and families on low incomes simply don’t earn enough to cover the costs and are being priced out of work as a result.

“The government must give the poorest parents a chance to work their way above the poverty line. We know that the best way out of child poverty is to help parents into work.”

Cuts to benefits

Cuts to the working tax credit have also hit poorer families. Four in 10 of those affected have considered giving up work because they will no longer earn enough to cover their childcare bills. The cut has added £500 extra on average to the childcare bill of low-income families.

Around 80 per cent of parents in low-income families who are in employment agreed with the statement: “Once I have paid for childcare, I am in a similar position to as if I was not working.”

A quarter of parents said they had given up work and a third said they had turned down a job, mainly because of high childcare costs. A further quarter of parents in severe poverty said they had been unable to take up education or training because of childcare costs.

Read more: Childcare costs shooting up twice as fast as wages

Regardless of income, six out of 10 parents said they cannot afford not to work but they struggle to pay for childcare.

Anand Shukla, acting chief executive of Daycare Trust, said: “Daycare Trust hears from parents every day who are being forced to make difficult decisions about their career and family life as a result of Britain’s high childcare costs.

“Being able to work and be financially independent is in the interests of both families and our wider society; yet as our survey shows, parents are being forced out of work as a direct result of how expensive childcare is.

“If you want welfare reform to ensure that work does pay for low-income families, then you need high-quality childcare provision that is affordable for parents.”

The charities want the government to increase the amount they plan to spend on childcare support under the new universal credit benefit.

A spokesman for the Department of Work and Pensions said: “”The cost of childcare is one of the most important factors for parents when considering work, and ministers have always said that under universal credit they will invest at least the same amount of money into childcare as in the current system.

“We are working closely with the Treasury and other interested groups to ensure we get this right.”