Childcare costs continue to rise according to new research
The Family and Childcare Trust’s 14th Annual Childcare Costs Survey tells an all-too-familiar story for working parents. Childcare costs continue to rise beyond the rate of inflation.
The figures are alarming:
- The cost of a part-time nursery place for a child under two has increased by 33 per cent over the course of this Parliament
- All types of childcare for children under the age of five have risen in cost by at least 27 per cent
- For the first time outside of London, some of the very lowest income parents will find the maximum amount of Working Tax Credits they can claim – £175 a week – will not cover even their part-time childcare costs
Iain McMath, CEO of Sodexo Benefits and Rewards Services, responds:
“Childcare nursery costs have risen by over 5% during the last year alone – and now stand at over £6,000 per year – meaning that parents are being forced to make drastic decisions regarding their finances and employment. The rise in childcare costs outstrips inflation and regularly exceeds mortgage expenditure as the biggest strain on family income. It’s a situation that threatens not only household budgets, but also the wider economy, since it pushes many parents towards abandoning work and staying at home.
The government has taken steps to address this problem by holding a childcare consultation to determine how childcare vouchers will be offered after the 2015 election. Existing employer-led childcare voucher schemes can currently save each parent up to £933 per year, contributing £1,866 to a family when both parents are working. On the other hand, the proposed Tax-Free Childcare Scheme is designed to save parents up to £2,000 per year, but in reality the average saving has been estimated at just £600. Therefore, for many parents, the incentive will be to start receiving childcare vouchers before the current cut off point in autumn 2015.
Regardless of what scheme the government offers after the upcoming election, the good news is that childcare vouchers are still available for children up to the age of 15. As such, parents that sign up for vouchers now will have the option to stay on the current scheme and continue receiving vouchers, even when a new scheme may start.”