Work is unaffordable for a third of parents because of childcare costs
Around a quarter, 23%, have also said they can no longer afford their current childcare bills.
Single parents are especially under pressure with 41% saying it’s unaffordable for them to work and pay childcare fees.
They also have the highest credit balances in the country and are three times as likely to fall behind on repayments.
Turning to credit
The report of 4,000 parents from Credit Karma suggests that some parents are using credit to pay for childcare costs.
Of the respondents, 15% said they are turning to credit and loan products to cover childcare costs compared to 11% using credit for holidays, 9% for dentistry care, and 8% for pet care.
Separate research this week showed that one in four parents had stopped working because of high childcare fees and 22% said they spend between 30% and 70% of their income on childcare costs.
Almost one in three parents, 30%, said they have had to make adjustments to their childcare provisions because of the costs involved.
In the UK parents face the highest fees of any developed country, according to the OECD. Fees are also expected to rise in the next year, as early years providers face cost increases of around 8%.
It comes as a huge shake-up to the childcare system was announced in the budget last month. It will see most children receiving 30-free term-time hours of childcare from when they are nine months. However, this will not be fully in place until September 2024.
Parents have the highest overall levels of debt, £1,609 on average compared to a national average of £1,327. Single parents have an average of £1,651 in debt.
Geographically, parents in London are hit hardest with 38% struggling to afford childcare costs and 48% said it was unaffordable to work when paying childcare fees.
The report revealed women and men are affected equally by high childcare costs but separate research shows that around three quarters of women think it makes no financial sense for them to work and pay for childcare fees.
Akansha Nath, head of partnerships at Credit Karma UK, said: “The rising cost of childcare is a problem facing many parents right now.
“As the cost of living continues to rise, it’s more important than ever for parents to budget their money and stay on top of their bill repayments as falling behind can lead to higher debt and more interest paid.
“Credit can be a great tool to cover the cost of rising expenses, if used responsibly. It’s critical that you only use as much as you’re able to reasonably pay back. There is also a wide range of options for those struggling to afford their current childcare arrangements, including leveraging the government’s tax-free childcare scheme, council community nurseries, and nanny share programmes.”