Childcare costs rise four times faster than wages
TUC CALLS FOR MORE SUPPORT FOR REGION’S PARENTS
CHILDCARE costs have risen 3.6 times faster than wages in the North East since 2008, according to a new research published yesterday.
Based on government figures, the analysis by the TUC reveals that in this region the average wages of those with a one-year-old child rose by 17% in cash terms – although pay is still falling in real terms – between 2008 and 2016.
However, over the same period, childcare costs went up by 62%.
While there is government support for childcare for children aged two and older, most working parents with one-year-olds do not get any state help with childcare costs.
And as around 950,000 working parents across the UK have a child aged one, these rising costs have huge implications for family budgets, warns the TUC, as parents are spending an increasing portion of their pay on childcare.
TUC Regional Secretary Beth Farhat said: “The cost of childcare is spiralling but wages aren’t keeping pace. Parents are spending more and more of their salaries on childcare, and the picture is even worse for single parents.
“Nearly a million working parents with one-year-old kids have eyewatering childcare bills. There is a real gap in childcare support for one-year-olds until government assistance kicks in at age two.”
Its research in the North East revealed:
A single parent working full-time with a one-year-old in nursery for 21 hours a week (21 hours is the median amount of childcare used per week for pre-school age children) spent 21% of their wages on childcare in 2016, up from 15% in 2008.
One parent working full-time and one parent working part-time with a one-year-old in nursery for 21 hours a week spent 14% of their salary on childcare in 2016, up from 10% in 2008.
Two parents working full-time with a one-year-old in nursery for 21 hours a week spent 11% of their wages on childcare in 2016, up from 7% in 2008.
The analysis also shows pressure is even greater on parents working full-time, especially single parents.
A single mum or dad in the North East with a young child in nursery for 40 hours a week would need to spend more than two-fifths (41%) of their pay on childcare – showing how difficult it is to balance work and family life without working fewer hours or getting support from friends and family.
Children and families minister Robert Goodwill said helping families access affordable childcare is ‘at the heart of this government’s agenda.
He added: “This is why we are investing a record £6billion every year by 2020 in childcare.
“As well as providing tax-free childcare to around two million households to help pay for childcare costs, we have doubled the free childcare available to working parents of three and four-years-olds to 30 hours a week, saving them thousands a year and helping them get back into work.
“Indeed, an independent evaluation of the early delivery of 30 hours free childcare found that 84 per cent of parents reported improved family finances as a result of the free childcare.”
The TUC is calling for universal free childcare from the end of maternity leave, more government funding for local authorities to provide nurseries and child care and a greater role for employers in funding childcare. Either through direct subsidy to employees or the provision of on-site childcare facilities.
Ms Farhat said: “Parents need subsidised, affordable childcare from as soon as maternity leave finishes to enable them to continue working, and so mums don’t continue to have to make that choice between having a family and a career.”
London – where childcare has risen 7.4 times more quickly than pay – has seen the biggest increase in childcare costs compared to wages, followed by the East Midlands (7 times), and the West Midlands (4.8 times). The average increase across England is four times.