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Childcare costs for under-twos soar above inflation

Joanna Faith
Written By:
Joanna Faith

Parents are paying 5% more for childcare for under-twos than they were a year ago, a new report has found.

Families are paying an average of £131.61 per week, or more than £6,800 per year, for a part-time nursery place.

The report by Coram Family and Childcare shows childcare costs in Britain have risen well ahead of consumer price inflation, which was 1.8% last month.

Parents also face a ‘postcode lottery’ with childcare prices and availability varying across the UK.

London and the South East are the most expensive regions, with the average cost of a part-time nursery place costing £165.47 and £144.90 a week respectively.

In the least expensive regions, the West Midlands and Yorkshire and Humberside, parents pay £116.25 and £113.76 per week, on average.

The findings also revealed many parents struggle to find childcare spaces, with availability little improved on last year.

In England, just over half (56%) of local authorities have enough childcare places for parents working full-time, compared to 57% in 2019.

Parents may also face gaps if they have children with disabilities, if their children are aged 12-14, or they work outside regular office hours.

Most families can get some support with their childcare costs through subsidies or free entitlements, but the report said the system is too complicated.

In England alone there are seven different ways families can get support, each with different eligibility criteria, which can leave parents at risk of missing out on entitlements, it said.

Claire Harding, head of Coram Family and Childcare, said: “Good childcare is essential: it enables parents to work and boosts children’s learning. But for far too many families in the UK, it just isn’t working. Recent government investment is welcome, but many families still face crippling costs, especially in the period from the end of parental leave to when a child turns three.

“Investing in childcare supports is good for us all because it helps parents to work now, and boosts children’s learning and skills for our future. We’re calling on the government to reform and simplify the childcare system so every parent is better off working after paying for childcare, and every child has access to childcare which supports their learning and development.”

The report calls for government action to help parents find affordable childcare, including increasing the maximum amount of childcare costs paid under Universal Credit and moving to upfront payments for childcare.

It also calls for 30 hours free childcare for three- and four-year olds in England and Wales to be extended to families where parents are in training, to help parents get better jobs.

A government spokesperson said: “We recently announced an increase in our hourly rates for councils to provide high-quality and free childcare places. And through our £1bn manifesto pledge, we will create even more wraparound and holiday childcare places to support working families.”