Parents paying nearly 20% of salaries on childcare

Parents are paying almost 20% of their wages on childcare, according to a report by Family Investments and economics consultants SQW.

The research is based on interviews with more than 100 local authorities and gives a picture of nursery and childminder care costs across the country.

It found that parents who pay for 25 hours of childcare each week can expect to pay £4,993 annually to cover childcare bills and says these costs are equivalent to 18.9% of average annual earnings. This average annual earnings figure takes into account disparities between part time and full time wages as well as gender differences.

Based on average earnings, a parent would need to work 391 hours each year to meet the average cost of childcare in Britain, says the report.

It found the most affordable urban location for childcare was Stoke in the West Midlands where costs are equivalent to 13.8% of average annual earnings in the area.

The West Midlands is an affordability hotspot with four of the top ten most affordable locations in the country located in the region (Stoke, Shropshire, Solihull and Dudley). The North West also features prominently with three of the top ten most affordable locations.

The least affordable locations are Ebbw Vale in Gwent, South Wales, when care costs were measured against average earnings. A parent there would need to spend 28.2% of their average income on meeting childcare costs. A wide variety of locations feature amongst the least affordable areas. All of the locations have one things in common, a lack of correlation between local earnings and childcare costs, says the report.

Kate Moore, Head of Savings and Investments at Family Investments said: “Family Investments has developed the Childcare Affordability Report to provide parents with detailed information on a critical issue. Sixty five per cent of families regularly pay towards their children’s care to enable parents to continue working. Across the country, these costs now equate to 18.9% of the average parent’s earnings, meaning that parents effectively spend a fifth of their time working towards meeting care costs.

“Childcare has emerged as an important policy issue in recent months, but the debate so far has focused on the national picture. The lack of correlation between local earnings and childcare costs highlighted in our report is stark. We urge those currently looking at childcare provision to investigate this disparity and identify whether more needs to be done to encourage greater provision, competition and ultimately greater affordability of care.

“Regardless of whether a parent works as a result of financial necessities or because of lifestyle considerations, employment should offer parents the ability to provide a financial safety net for their family. At a time when the overall financial burden parents face is increasing, employment should allow them the ability to save towards the future and provide for some of life’s major costs such as higher education. It is therefore only reasonable that care costs are fair and allow parents to achieve this.”

Families can explore how their area ranks against the national average by selecting county level data at the following web address –

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