Issue date
20 Oct 2017
TUC highlights ‘childcare gap’ for parents with one-year-olds

The cost of childcare for young children has risen more than four times faster than wages since 2008, according to new analysis published by the TUC today (Friday).

The analysis reveals that in England the average wages of those with a one-year-old child rose by 12% in cash terms – although pay is still falling in real terms – between 2008 and 2016. However, over the same period, childcare costs shot up by 48%.

And in some parts of the UK the cost of childcare has risen by even more – in London childcare has risen 7.4 times more quickly than pay, in the East Midlands 7 times, and in West Midlands 4.8 times.

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.

In England:

  • A single parent working full-time with a one-year-old in nursery for 21 hours a week spent more than a fifth (21%) of their wages on childcare in 2016, up from around a 6th (17%) 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 a 7th (14%) of their salary on childcare in 2016, up from around a 10th (11%) in 2008.
  • Two parents working full-time with a one-year-old in nursery for 21 hours a week spent around a 10th (11%) of their wages on childcare in 2016, up from around a 13th (8%) in 2008.

The analysis also shows pressure is even greater on parents working full-time, especially single parents. A single mum or dad with a young child in nursery for 40 hours a week would need to spend two-fifths (40%) 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.

TUC General Secretary Frances O’Grady 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 eye-watering childcare bills. There is a real gap in childcare support for one-year-olds until government assistance kicks in at age two.

“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.”

Ellen Broomé, Chief Executive at the Family and Childcare Trust, said:

“Childcare is as vital as the rails and roads to making our country run: it boosts children’s outcomes, supports parents to work and provides our economy with a reliable workforce.

“For too many parents, however, high childcare costs mean that it does not pay to work. Low-income families claiming Universal Credit typically take home just £1.96 per hour after childcare costs have been paid, and some get even less than this. We must make sure every parent is better off working after childcare costs.”

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

  • Universal free childcare from the end of maternity leave. This would help single parents and families – especially younger mums and dads with less seniority and lower pay – to stay in work and progress their careers after having children. 
  • More government funding for local authorities to provide nurseries and child care.
  • A greater role for employers in funding childcare. Either through direct subsidy to employees or the provision of on-site childcare facilities.
Editors note

- Increase in cost of childcare and the average wages of those with a one-year-old child from 2008-2016.

Area

% change in under 2 nursery costs (2008-2016)

% change in nominal wages (2008-2016)

Number of times childcare has risen faster than wages

England

49

12

4.0

North East

62

17

3.6

North West

47

11

4.3

Yorkshire and Humberside

44

12

3.7

East Midlands

64

9

7.0

West Midlands

67

14

4.8

East of England

35

12

2.9

London

59

8

7.4

South East

54

12

4.5

South West

44

11

4.0

Figures from the Labour Force Survey (LFS) and the Family and Childcare Trust (FCT).

% wages spent on childcare in 2008

% wages spent on childcare in 2016

Percentage point increase

A single parent working FT with a 1-year-old in nursery for 21 hours a week

17

21

4

One parent working FT and one parent working PT with a 1-year-old in nursery for 21 hours a week

11

14

3

Two parents working FT with a 1-year-old in nursery 21 hours a week

8

11

3

A single parent working FT with a 1-year-old in nursery for 40 hours a week

32

40

8

Source: LFS and FCT.

We have used 21 hours as the median amount of childcare used per week for pre-school children is 21 hours: www.gov.uk/government/statistics/childcare-and-early-years-survey-of-parents-2014-to-2015

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