Save the Children highlights the cost of holiday childcare for those on Universal Credit.
Hard pressed parents are having to find up to £800 extra to cover the cost of childcare this summer, driving many families into debt, according to Save the Children.
It says thousands of families on Universal Credit are being made to pay for childcare costs upfront and having to wait up to a month to be reimbursed. Increased costs during the school holidays mean parents are being forced to take out loans to cover the shortfall, or even give up work altogether says the charity.
Childcare costs increase during the school holidays, when many parents rely on holiday clubs or childminders while they are at work. Parents of pre-school-aged children are also affected as they lose their free childcare entitlement during the holidays. Save the Children says a parent with a three or four-year-old who usually receives 30 free hours of childcare could face an increase of between £530 to £832 during the summer holidays, depending on where they live.
The charity also highlights difficulties over the different number of days in each month which leaves some parents regularly having to pay substantially more to cover increases in their monthly bills. Others say their childcare providers expect them to pay for whole terms upfront – money they just don’t have.
There are 30,000 parents in England currently getting support with childcare through Universal Credit. This is set to rise to half a million families when Universal Credit is eventually rolled out nationwide.
Save the Children says more than three-quarters (78%) of low-income families with young children in England have no savings which means spikes in childcare costs will push many of these families into the red, or block them from going back to work.
Martha Mackenzie, Save the Children’s Director of UK Poverty Policy, said: “It’s simply not right that families are being driven into poverty and debt by soaring childcare costs. Parents tell us it feels as if the system is stacked against them. They rely on childcare to go to work, but when the school holidays come around they find themselves faced with sky-high childcare bills they can’t afford. They are having to resort to desperate measures – cutting back on essentials, falling behind on bills or getting into debt – just to go to work.
“Instead of setting families up to struggle, the government must change the system so that parents can get help with their childcare costs before they need to pay fees. This would make a massive difference to parents and children living in poverty — and it wouldn’t cost more money.”