The escalating cost of childcare

Children at nursery raising their hands


Over the past few weeks there has been more than one occasion when the government has queried whether benefit payments should be localised, so that those living in areas with a lower cost of living automatically receive less than those in the South East, for example.

This potential regionalisation of welfare is just one of the many aspects the government is discussing in its bid to reduce the welfare bill and the nation’s deficit. Whether it proves a palatable change or a political hot-potato remains to be seen, but it has highlighted the variations in the cost of living across the UK.

Be it salaries, house prices, rents, travel expenses etc, the incomes and outgoings of families varies considerably depending where you live. And this has been further highlighted in a report published by children’s saving provider, Family Investments, detailing the cost of childcare across the country.

The report surveyed 124 local authorities and official earnings data to determine a league table of affordability for every county and town. On average it found that families pay almost a fifth (18.9%) of their earnings on childcare each week, highlighting the extent of the burden of childcare costs for working families.

The national picture

– Parents who pay for 25 hours of childcare each week can expect to pay £4,993 annually to cover childcare bills in Great Britain today

– 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.

The most affordable locations

– Stoke in the West Midlands is the most affordable urban area in Britain for parents to meet childcare costs – 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

– Ebbw Vale in Gwent, South Wales, was found to be the least affordable location on our measure of care costs relative to average earnings. A parent would need to spend 28.2% of their average income on meeting costs

– A wide variety of locations feature amongst the least affordable areas. All of the locations have one thing in common, a lack of correlation between local earnings and childcare costs.

To view the full report and to use the Childcare Affordability Tool visit For information about the financial help available for families including information on child tax credits and working families tax credits visit This blog was posted by Family Nest.

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