Childcare "costs more than a mortgage"

The Momentum UK Team 04 March 2014

Some parents in the UK are spending more of their income on childcare than on their mortgage, according to a new report.

The Family and Childcare Trust’s annual report, released today, reveals the average cost of childcare for working parents. The data is taken from local authority family or children's information services in England, Wales and Scotland. According to the report, the average fees for families with one child in part-time nursery and another in an after-school club are £7,549 a year. The average mortgage in the UK costs an estimated £7,207 a year.

Parents requiring full-time childcare face even steeper costs; the report claims that full-time childcare costs £11,700 a year - almost two thirds more than the average mortgage. This is a problem that has intensified in recent years; working parents have seen a 27% increase in the cost of childcare since 2009, while wages have remained static. The report notes that this is despite successive governments spending £6bn a year on supporting childcare.

The report also reveals that parents in Britain spend a higher proportion of their income on childcare than most other European countries; in 2012 British parents contributed on average 26.6% of their salary towards childcare costs. The only country to top this percentage was Switzerland, and the average parental contribution in OECD countries is 11.8% of net income. As a consequence, maternal employment rates for those with children under five are lower in the UK than in most OECD countries.

Anand Shukla, chief executive of the Family and Childcare Trust, commented on the findings:

“Children are losing out vital early education and families remain trapped in poverty because they cannot make work pay.

“Childcare providers struggle with debts. Women fail to return to the labour market after they have children and the economy loses their skills and their taxes.”

He continued:

“We need a... system that helps parents who want to work and contribute to the economy and gives children the best start in life.”