You are here: Home - Household Bills - How to -

Pre-school childcare costs more than mortgage or rent: what parents can do

Written by:
Working parents with pre-school age children are paying more for childcare each month than to live in their own home, new research reveals.

Figures from insurer Royal London show the monthly cost of full-time nursery care for a child under two in England costs £1,065 or £1,040 for a two and three-year-old, while a typical mortgage costs £658 a month or £833 to rent.

The research suggests the total cost for childcare in pre-school years is £34,943 per child, assuming both parents return to full time work when the child is nine months and the child starts school at four and a half.

Becky O’Connor, personal finance specialist for Royal London, said: “The financial pressure on people with young families is immense and can last a decade.

Young couples rely on two full-time salaries to meet living costs before children come along.

“Once children arrive, childcare costs have to be paid and one parent often goes down to part-time hours, reducing household income.

“As a result of this ‘concertina’ effect of higher costs and reduced income, there is very little left at the end of a typical month for savings or emergency costs.

“Paying for childcare puts parents at real risk of financial hardship.”

To alleviate the financial burden of childcare costs, there are options for parents.

The government’s tax-free childcare scheme which gives you up to £2,000 a year per child to put towards childcare costs.

You open a designated account on the website and for every 80p you put in, the government will give you an extra 20p, and you can pay in up to £10,000 a year.

To be eligible, both parents must work and earn less than £100,000.

For more information, go to

Royal London is publishing a guide to help families with their financial planning. It will be available here from Tuesday 11 June.


There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

ISAs: your back-to-basics guide for 2018/19

Here’s everything you need to know to make the most of your unused ISA allowance ahead of the 5 April deadli...

A guide to Sharia savings accounts

A number of Sharia savings products have upped their game in recent months, beating more familiar competitors ...

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

  • “Families tend not to talk about money and death. But if we don’t talk about these themes it becomes very hard to m…
  • RT @STEPSociety: UK Ministry of Justice abandons plan to increase EW probate fees, described by STEP’s Emily Deane TEP as a stealth tax on…
  • RT @STEPSociety: UK Ministry of Justice abandons plan to increase EW probate fees, described by STEP’s Emily Deane TEP as a stealth tax on…

Read previous post:
Hargreaves Lansdown boss apologises to clients in Woodford fund

The boss of Hargreaves Lansdown has apologised to customers who have money locked in Neil Woodford’s suspended fund.