The cost of living crisis and new data on nursery fees have put childcare costs in the spotlight.
Over the next month or so, Emily will have to decide whether she leaves her job.
“I don’t want to do it. It makes me feel like I’ve failed, like I can’t do the basics for my son,” says Emily, who is a claims administrator for a shipping company in Portsmouth. “It makes you think all these horrible things. I’ll just feel like a failure if I have to quit.”
Emily, who works 9am-4pm five days a week, feels pushed to resign because of childcare costs for her toddler. Up until now, she and her husband paid for a childminder for one day a week and their relatives took turns on the other days. But in the spring Emily’s grandparents became too unwell to keep doing their two days a week.
Emily and her husband are about to see their monthly childcare costs rise from £156 to roughly £600. She already only has £300 left over from her salary after she pays her half of the family’s rent, non-food bills, and childcare fees. The higher childcare costs will simply “wipe that out,” she says.
British families pay the second-highest childcare costs in the developed world, according to OECD data. The UK does not have state-funded or heavily-subsidised nurseries, apart from a few exceptions. Instead, working parents with babies and toddlers pay private nurseries and childminders, with fees that commonly exceed £1000 per child per month for a full-time place. All children qualify for some state subsidies when they turn three, but even then fees often run to hundreds of pounds per month.
“Childcare fees are completely unmanageable” says Lauren Fabianski at Pregnant Then Screwed, a campaign group for mothers’ rights. Two-thirds of families say their childcare costs are equal to or more than their rent or mortgage, a Pregnant Then Screwed survey this year found. The average annual nursery fee for a child under two has risen by 44% over the last decade, according to a Trades Union Congress analysis released yesterday.
And the end result? Mothers are leaving their jobs, reducing their hours, or working nights, because the numbers don’t add up. NHS Flex, which campaigns for flexible working in the NHS, asked healthcare workers this month if they had quit or switched to night-shifts due to childcare costs. Their instagram account was inundated with responses like the one below.
Families are finding high childcare costs especially hard as the UK’s cost of living crisis pushes up all household bills. Chancellor Rishi Sunak’s spring statement came under fire earlier this year for containing no mention of childcare costs, while Mumsnet founder Justine Roberts grilled Prime Minister Boris Johnson on the issue this month.
“All the inflation, on top of everything, it’s just making it worse…it’s not just childcare at the moment, it’s everything else too,” says Emily. “We’ve cut a lot out. Me and my husband aren’t having breakfast any more; just our son eats.”
There are no official statistics that track how many mothers leave work specifically due to childcare costs. But the number of women not working in order to “look after family or the home” has risen by almost 6% in the past year, bucking a long-term trend of this figure declining. The number of women aged 25-34 who are not in the workforce has risen by over 12%, although this figure is not broken down by reasons.
Both of these rises could be due to several factors that weigh more heavily on women – childcare costs, a shortage of childcare places in many districts, looking after older relatives or those with special needs, and the impacts of taking on increased caring responsibilities during the Covid pandemic.
Perhaps surprisingly, the “should I quit?” dilemma also hangs over women on high incomes. Claire* is seriously considering leaving her job at a multinational bank in London because the nursery fees for her two children cancel out the vast majority of her income.
“I feel like that’s the sensible option, for the family and money and stuff,” she says. “[But] to be quite blunt, I don’t really want to be a stay-at-home mum…I enjoy going to the office and talking to people and getting projects done. I like having a job and earning my own money.”
Claire, who works four days a week in the compliance department of her bank, takes home £3,200 per month. But the total nursery fees for her three year old and her 14-month-old are just over £2,500 per month. While salaries in her sector are relatively high, the nursery fees in her neighbourhood in Surrey are correspondingly high too.
“When I tell anyone who doesn’t have kids about my childcare costs, they just don’t understand it. Everyone I tell, it just blows their minds,” she says.
Both Claire and Emily say they would only stop work until all their children have turned three and qualify for some state subsidies. But they both feel forced into taking this break, which they know will affect their long-term career progression.
“Many parents think [that subsidy] just starts too late… it’s a long time to wait to get support with the cost of childcare,” says Professor Jennifer Tomlinson, an expert on gender and employment relations at Leeds University. After not working for a few years, many women then end up with new employers and less senior roles than they had before.
“Taking a year’s maternity leave plus two years out of the labour market will have a significant negative impact on women’s earnings and careers over their lifetime. That’s just clear,” Tomlinson says.
Tomlinson adds that we must shift the public conversation about childcare costs away from comparing them solely to the mother’s income, and instead think about them as a household cost, so that the onus isn’t immediately placed on women to adjust or leave their jobs.
Women taking years out from the workforce doesn’t just affect them and their households – it also causes a drag on the national economy. If the UK could boost its female employment rate in line with that of Sweden, which heavily subsidises childcare costs, this would in turn boost the economy by £140bn per year, according to PwC research in 2020.
When pressed on childcare costs, the UK government points to the maze of subsidies that parents can apply for. But these subsidies are notoriously fiddly and some only apply to parents who are already working and earning a certain amount, excluding those on lower incomes and those who need childcare so they can study or apply for jobs.
Perhaps most importantly, these subsidies do not even get close to covering childcare costs. Even if a family is eligible for all the subsidies on offer, a nursery place can still cost hundreds of pounds a month. In 2017 the government launched a “30 hours free childcare” scheme for 3- and 4-year-olds in England – but it knowingly underfunds this by thousands of pounds per child per year, Freedom of Information requests revealed last year, forcing nurseries and childminders to charge top-up fees for what should be free hours.
The government is currently proposing to change staff-to-child ratios in childcare settings to cut staffing costs, despite previous unsuccessful attempts to do this. The move has been widely criticised by the sector in terms of children’s safety, staff wellbeing, and only creating negligible savings for parents.
“These people know diddly about what it’s really like working in Early Years,” says Neil Leitch, CEO of the Early Years Alliance, which represents over 14,000 nurseries, childminders and pre-schools in England. “It’s like someone has come forward and said: ‘What’s the worst possible time that we could consider changing ratios? I know, let’s do it when children need more support in their development because of the pandemic, let’s do it when the workforce is walking out because they’re over-stressed.’ ”
Many nurseries are struggling to break even and retain staff, as they emerge from a pandemic that put them on the frontline with low pay and little support. Many independent nurseries have had to close or sell up to private-equity groups, especially in the deprived areas where both parents and children are most in need, Leitch says.
“If you look at the language of everything that has come out, in recent times, from [the government], it’s all about reducing costs. Never is the child mentioned. The child has become a commodity, in terms of balancing the books,” he says.
The solution is simply that the government puts more funding into childcare, says Tomlinson at Leeds University. This would mean properly funding the existing subsidies, extending the “free hours” subsidies to children under three, and having some fully state-funded nurseries especially in deprived areas.
Calls for more state funding are echoed by many organisations, including the Trades Union Congress, the Early Years Alliance and Pregnant Then Screwed, and this has been a successful model in several developed countries.
Working parents’ employers have limited powers to help. Workplace nurseries seem like a neat solution, but childcare settings are complex and costly to run. Flexible and remote working are helpful for parents whose jobs suit this set-up, but mostly in terms of childcare drop-offs and pick-ups. There are small ways to help – the Greater London Authority offers its staff interest-free childcare loans for upfront costs such as nursery deposits.
In Portsmouth, Emily and her husband had been getting ready to buy their first house this year. But, since Emily’s grandparents became too unwell to help with childcare, they’ve had to dip into their deposit savings to cover extra childminder fees.
“You’re damned if you do, and you’re damned if you don’t,” Emily says. If she stays in work, their increased childcare costs will mean that they no longer qualify for a mortgage. If she leaves work, the family will still be stretched as they try to live off one income during the cost of living crisis.
“I get angry,” says Claire, the mother in Surrey. “But I also get tired of getting angry, that women are leaned on by the government to do all the work, to support the entire economy, just so that they can save money.”
*Name has been changed