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Childcare costs forcing parents out of workforce


Families in which both parents worked before children were born have had to give up a salary due to soaring childcare costs.

Childcare costs

The soaring cost of childcare is forcing many parents out of the workforce, according to new research.

Family and Childcare Trust says that an increasing number of families are being given little choice but to become single-earner households.

Working for nothing

Those who do return to work after having children often find they are effectively working for little or no salary because their earnings barely offset the cost of childcare and commuting.

The average cost of sending a child under the age of two to nursery part-time has risen by around a third over the past five years, according to Family and Childcare Trust.

The study revealed that low-income parents will find even the maximum allowance of Working Tax Credits - £175 a week - will not be enough to cover childcare costs.

Stephen Dunmore of Family and Childcare Trust says: "if childcare costs continue to rise at this pace, the benefits of this new financial support to parents will be quickly eroded."

Childcare fees outweigh mortgages

Justine Roberts, CEO of parenting website Mumsnet, says the issue is a "perennial concern" on the parenting website.

"More than a third of our users have had to consider seriously whether they could afford to return to work following maternity leave, when confronted with the daunting reality of fees that are higher, per month, than the average UK mortgage."

Jodie Ballmer, a nurse from south-east London, says that since she and her husband had their first child in 2009, she has had little option but to remain a full-time mother.

'Childcare fees made me give up work'

£20 notes in a drain

"My hours were a shift pattern, consisting of either 8am-4pm or 12pm-8pm, and they varied every week," Ballmer says.

"I had to leave the house to catch a train at 6.35am, and because my husband wasn't back from work until 7.30pm, we would have had to find a childminder from 6am to 8pm."

She adds that with take-home pay of about £1,700 a month and childcare fees of as much as £1,200 a month, she would have been left with £350 once the cost of her £150 Travelcard was deducted.

"Bearing these calculations in mind, we personally didn't see the point in not seeing our child based on our working hours."

Extra tax relief planned

The government said it would increase the amount on which parents can claim tax relief on childcare.

Initially due to start from autumn 2015, families will be able to offset up to £10,000 per child off nursery or after-school care costs against income tax – a potential saving of £2,000.

This has now been delayed until early 2017 following a legal dispute.

But Ballmer says that it is not just a question of money.

"As far as government policies are concerned, I think childcare needs to be more flexible for people working outside of the normal 9-5 hours."

Childcare an issue post-election

"The government's move to increase the tax relief threshold will certainly be significant for many families," she says.

"And allowing parents to claim for over-fives, too, will reassure those who were worried about losing support for older children.

"That said, Mumsnet users have expressed surprise that this tax relief is to be extended to families with joint earnings as high as £300,000, particularly when child benefit was capped on joint earnings of £100,000."


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