Childcare fees have risen three times faster than wages since 2008, TUC analysis reveals

Working parents with children under five have seen nursery fees rise three times faster than their wages over the past decade, according to new TUC analysis published today (Monday).

The analysis shows that childcare costs have rocketed by 52% per week since 2008 for families with a full-time and a part-time working parent. Over the same period their wages have gone up by just 17%.

The situation is even worse for lone parents. Childcare costs for a single mum or dad working full time have risen seven times faster than earnings. 

Fees in England are now on average:

• £236 a week for a child under 2 in nursery, compared to £159 in 2008
• £232 a week for a child over 2 in nursery, compared to £149 in 2008.

Over the past 10 years the growth in nursery fees for families with a full-time and a part-time working parent has outstripped wages the most in the West Midlands, followed by the South East and the North East.

Shortfall in support

The analysis shows that despite government support (including free nursery hours for some working families and the new tax-free childcare scheme) families are still being left with huge childcare bills. Looking at parents with a 3-year-old and a 1-year-old:

• A family on average earnings (with a parent working full-time and a parent working part-time) has to stump up more than £4,700 a year to cover fees.
• A low-income working family (with a parent working full-time and a parent working part-time) needs to find nearly £2,000 a year.
• A single parent on average earnings (working full-time) pays just over £6,000.
• A single parent on average earnings (working part-time) has to fork out £1,900.

TUC General Secretary Frances O’Grady said: “Working parents have seen childcare fees rocket, as their wages have stagnated.

“Despite government support families still face eye-watering nursery bills.

“Britain’s cost of living crisis is having a huge impact on working mums and dads.”

Ellen Broomé, from Coram Family and Childcare, said: “Successive governments have rightfully invested in childcare but, while this investment has been welcomed, many parents remain frozen out of work because of high childcare costs,

“We know that high quality childcare boosts children’s outcomes, benefits the economy and allows parents to make genuine choices about work and care. But in the last year alone, childcare costs have risen by 7%. Urgent action is needed to make sure all parents are better off working after paying for childcare.”

Recommendations

To address this increasing pressure on working families, the TUC would like to see:

• Subsidised, affordable childcare from as soon as maternity leave finishes. This would enable parents to continue working and mean mums don’t continue to have to make that choice between having a family and a career. There is currently a real gap in childcare support for one-year-olds until government assistance kicks in at age 2 or 3.
• More government funding for local authorities to provide nurseries and childcare.
• A greater role for employers in funding childcare. Either through direct subsidy to employees or the provision of on-site childcare facilities.
• Increase the childcare support provided by tax credits and Universal Credit. Including by reversing cuts to the UC work allowance, scrapping the unfair ‘two child’ policy lifting the cap on benefit uprating.