One in ten parents ‘pay to work’ as childcare costs soar

One in ten parents effectively pay to work by spending their entire take-home pay, or more, on rising childcare costs, new research has revealed.

Campaigners have warned that parents – particularly mothers – are being forced into debt in a bid to maintain their careers.

Full-time nursery school tuition for a child under two in the UK costs an average of around £13,000 a year, more than half the take-home pay of a typical £33,000 salary, according to recent analysis by Penfold, a pensions provider.

But thousands of parents pay more than they earn just to stay at work. A survey of 24,000 parents by campaign group Pregnant Then Screwed found that one in ten parents pay the same or more than their daily wage on childcare costs.

More than a quarter paid 75% of their childcare pay and a fifth paid more than half.

A chronic shortage of affordable childcare in the UK has been exacerbated by rising food, energy and staffing costs in nurseries and providers. Campaigners have warned that government funding for the childcare sector is not keeping pace with soaring costs, with devastating effects on parents’ income, pension wealth and mental health.

Pregnant Then Screwed’s Joeli Brearley said many parents had dropped out of the workforce or worked fewer hours because they couldn’t access affordable childcare.

Ms Brearley said: “We don’t just have a cost of living crisis in the UK, we have a cost of working crisis with one in 10 parents now paying to go to work.

“That’s if they can even secure a childcare place – we’ve lost thousands of providers in the last year because they simply can’t afford to stay open.”

The survey found that a third of parents had been forced into debt trying to maintain a career and pay for childcare.

Lyndsey Harvey, 36, and her husband are permanently overdrawn, on which they pay interest, and have borrowed from family to cover childcare costs.

When both their children, aged five and two, were in full-time work, the couple paid almost £1,000 a month in school fees, although this has now halved since the eldest started school.

Ms Harvey said: “We are constantly overdrawn and it is costing us. We’ve borrowed left, right and center to break even.

“Between us we earn more than £50,000 and before we paid for childcare we had £500 of disposable cash every month which was disappearing.”

Mrs Harvey, who asked to speak using a pseudonym, even stopped paying into her generous NHS pension to contribute an extra £200 to care fees each month. He added: “It’s devastating as it’s a fantastic pension and I know it’s going to cost me later but we have no choice.”

Providers are expected to increase fees by an average of 8% this year, according to the Early Years Alliance, although many will be forced to make larger increases.

A third of nurseries, nurseries and nurseries are at risk of closing in the next 12 months unless they can pass on higher costs to parents or find additional funding.

Ms Brearley added: “It’s important to remember that this isn’t just a parenting issue, this is an issue for the whole of society – we’re bleeding talented, skilled women from our workforce because of our dysfunctional childcare system.

“The question is not whether we can afford to invest in childcare, it’s whether we can afford not to.”