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Childcare fees have risen 40% in a decade

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13/06/2022
Childcare fees have risen by 44% between 2010 and 2021, adding £2,000 to bills, a union reveals.

In 2010, families with children under the age of two paid an average annual nursery bill of £4,992.

But by 2021, this had risen to £7,212 – a 44% increase according to the research published by the Trades Union Congress (TUC).

The UK now has the second highest childcare costs among leading economies, according to the OECD. And the TUC revealed a third of parents spend more than a third of their wages on childcare.

It estimated that parents with children under two have to work 9.4 hours a week on average just to be able to cover 25 hours per week of childcare at nursery. This is up from 8.7 hours per week in 2010.

The TUC warned that many parents with pre-school children are caught in a “catch 22” scenario as rising nursery costs are coupled with a fall in statutory maternity pay since 2010.

The union explained that statutory maternity pay was worth £151.97 a week in 2021/22 which is a £5 a week (3%) fall in real terms.

Given the “paltry” rate of statutory maternity pay (after 39 weeks it falls to zero), the TUC said many mothers are forced to return to work early, leaving them to cope with sky high childcare fees instead.

As such, the TUC is calling for an urgent cash boost for the childcare sector, to give childcare workers better wages, as well as a long-term funding settlement to make sure childcare is affordable and available for families. It reinforced that reducing staffing ratios would damage the quality of childcare services.

Big childcare bills while wages stagnate

TUC general secretary, Frances O’Grady, said: “Childcare should be affordable for all. But parents are spending a massive chunk of their pay packets on childcare bills, while their wages stagnate.

“This is putting huge pressure on family budgets at the same time as other living costs are shooting up.

“New mums are caught in a catch 22. The UK’s miserly rate of statutory maternity pay means many are under financial pressure to return work early and are then at the mercy of sky-high childcare fees. We urgently need to get wages rising to stop households drowning in bills.”

Related: See YourMoney.com’s Five ways to save money on summer childcare costs for more information.

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