Childcare costs are double the inflation rate – expert on ‘postcode lottery’ for parents
Childcare costs have surged in recent years according to the most recent annual childcare survey from Coram Family and Childcare Trust. This surge is not only higher than the rate of inflation, but it is also actually more than double the official rate. According to the ONS, inflation is currently at 1.8 percent and the UK has an official target of two percent.
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As Coram detail, parents will likely wish that their childcare costs rose at that rate:
“Britain’s parents are paying five percent more for childcare for the under-twos than they were one year ago, according to Coram Family and Childcare’s 20th annual Childcare Survey.
“The survey finds that parents have been hit by childcare costs rising well ahead of inflation, and are now paying an average of £131.61 per week, or over £6,800 per year, for a part-time nursery place”.
“The survey also reveals that parents face a ‘postcode lottery’ with childcare prices and availability varying significantly across the country.
“The most expensive regions in the UK are London and the South East, where the cost of a part-time nursery place for a child under two is £165.47 and £144.90 per week respectively, compared to the least expensive regions – £116.25 in the West Midlands and £113.76 in Yorkshire and Humberside.”
These figures have drawn the attention of finance professionals, as Rebecca O’Connor, personal finance specialist at Royal London, responded:
“The cost of childcare can plunge anyone on modest earnings straight into debt and seriously erode a family’s quality of life during the early years of a child’s life.
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“Parents can’t afford childcare easily, but can’t afford not to use it either, as that means one parent giving up work, which can mean an unmanageable reduction in household income. “The government needs to raise support for childcare costs to meet the demands of modern families, whose living costs usually require two incomes.”
The government does provide support for families on low incomes with the likes of Child Benefit and Universal Credit. However many will be examining what is announced in the upcoming budget to see if families can receive any more relief.
While little has been confirmed, it is likely that support for families raising children will be included as it was a key part of the Conservative Party’s 2019 manifesto.
As it detailed: “Raising a family should be the most fulfilling experience of your life. But for too many parents, the costs of childcare are a heavy burden.
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“We want to give parents the freedom, support and choice to look after their children in the way that works best for them.
“We will establish a new £1 billion fund to help create more high quality, affordable childcare, including before and after school and during the school holidays.”
As this is a very clear statement, Rebecca revealed that she expects this promise to manifest from the budget.
She also provided a bit more insight into how it will be delivered by predicting that the funding will come through over the next three years and it will be funnel into before and after-school clubs for school-age children.
As mentioned previously however very little has been confirmed when concerning the upcoming budget. Because of this, many experts have been theorising about what may emerge and even suggested “best case scenarios”.
Concerning childcare, Rebecca provided her personal wish for what will come from the budget: “Thirty hours funded childcare entitlement brought from age three to the end of maternity/ parental leave.
“There is currently a support gap for parents from when they go back to work when their child is nine months to one year old, and when funded hours from the Government kick in. This is the hardest phase to manage financially for working parents as childcare for this age group is more expensive.”
As the budget is mere days away, it will soon be possible to gauge how accurate some of the predictions out there have been.
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