Childcare costs rise by over double the rate of inflation

New research shows childcare costs for under twos rose by 5% last year – well above inflation.

Small child playing with brightly coloured bricks on the floor in a childcare setting


Parents in the UK are paying 5% more for childcare for the under-twos than they were a year ago, according to a major childcare survey.

Coram Family and Childcare’s 20th annual Childcare Survey finds that parents have been hit by childcare costs rising well ahead of inflation, and are now paying an average of £131.61 per week, or over £6,800 per year, for a part-time nursery place.

The survey also reveals that parents face a ‘postcode lottery’, with childcare prices and availability varying significantly across the country. The most expensive regions in the UK are London and the South East, where the cost of a part-time nursery place for a child under two is £165.47 and £144.90 per week respectively, compared to the least expensive regions – £116.25 in the West Midlands and £113.76 in Yorkshire and Humberside.

Even where parents can afford childcare, many will struggle to find it, with availability little improved on last year. In England, just over half (56%) of local authorities have enough childcare for parents working full time, compared to 57% in 2019. Some families face even bigger gaps, as fewer than one in five local authorities in England have enough childcare available for children aged 12-14, children with disabilities and parents working outside regular office hours. Across England, the East Midlands and East of England report the lowest levels of availability across these areas.

The report highlights that whilst most families can get some support with their childcare costs through cost subsidies or free entitlements, the system is too complicated. In England alone there are seven different ways that families can get support with their childcare costs, each with different eligibility criteria, which can leave parents at risk of missing out on the support they are entitled to.

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. There are seven different types of childcare support depending on families’ individual circumstances, and many parents find it difficult just to find out what’s available to them.

“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 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 Childcare Survey 2020 sets out actions that Scottish, Welsh and UK governments can take to help parents find affordable childcare:

●        Reform Universal Credit so it doesn’t lock parents out of work: increasing the maximum amount of childcare costs paid under Universal Credit and moving to upfront payments for childcare

●        Regularly review the funding rate for free early years entitlements to make sure that they meet the cost of delivering high quality childcare

●        Extend the 30 hours free childcare for three and four year olds in England and Wales to families where parents are in training, to help parents get better jobs

●        Double the early years pupil premium, to boost outcomes for the most disadvantaged children

●        Reallocate any underspend against the budget for Tax-Free Childcare to other parts of the childcare system – and focus this on the most disadvantaged children.

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