The survey of 2,209 parents in England and Wales, carried out for the TUC (Trades Union Congress) finds nearly one in five (18 per cent) with children not yet in school spend between a third and half their salary on childcare. Around one in seven (15 per cent) said that the costs take up more than half of their pay.
Black and minority ethnic (BME) and disabled working parents were particularly likely to spend more of their income on childcare.
More than a third (35 per cent) of disabled parents said they’re spending over a third of their pay on childcare costs, compared to 16 per cent of non-disabled workers.
The TUC – a union body – believes this is because of discrimination in the jobs market that means BME and disabled workers are much more likely to be in low-paid jobs.
The union body is now calling on the Government to come up with a long-term plan to get wages rising across the economy and is asking ministers to raise the minimum wage to at least £10 an hour immediately.
On top of this, it wants ministers to work with unions and employers on sector-wide fair pay agreements to urgently improve living standards.
The TUC has also repeated its call for an ‘urgent cash boost’ for the sector – like the financial help given to transport networks – to give childcare workers better wages, and a long-term funding settlement to make sure childcare is affordable for families.
TUC general secretary Frances O’Grady said, ‘Parents are spending a massive chunk of their pay packets on childcare bills, while their wages stagnate.
‘This is putting huge pressure on family budgets. We desperately need a plan to get wages rising across the economy, or too many families will have to choose between turning their heating on or putting food on the table.
‘Every worker in Britain should be paid a wage they can live on – that goes up with the cost of living.
‘And the Government must commit to a boost in childcare funding to ensure decent affordable childcare for everyone.’
‘Things are likely to get much worse before they get better’.
Neil Leitch, chief executive of the Early Years Alliance warned that with the cost-of-living pressures, childcare fees were likely to increase further.
He said, ‘Let’s be clear: it is the Government's decision to continue to knowingly underfund the early years sector year upon year that has left settings with no choice but to increase fees and charges, or risk going out of business completely. Our two-year freedom of information battle with the Department for Education revealed that the Government knew perfectly well that the introduction of the 30-hours offer alongside inadequate funding levels would lead to increased childcare costs, particularly for parents of younger children.
‘Nurseries, pre-schools and childminders are facing many of the same cost-of-living pressures – such as spiralling inflation and soaring energy prices – as the families they support, not to mention the impact of business rate hikes, minimum wages increases and national insurance contribution rises. With Government funding for the sector still nowhere near what is needed to cover these costs, things are likely to get much worse before they get better.’
Purnima Tanuku, chief executive of the National Day Nurseries Association (NDNA), echoed the Alliance’s comments and said ‘nurseries were telling them they are looking at fee increases of between 4-9 per cent just to stay open.’
She added, ‘Childcare providers across the UK are facing soaring costs including increased minimum and living wage rates, spiralling utility bills and inflation on everything they provide for children from food to educational resources. Nurseries in England will also be hit with business rates bills from April averaging £12,400. As a result, many across the UK are facing a struggle just to remain sustainable.
‘But Government rates currently paid to providers to deliver funded childcare places do not cover their costs or keep pace with crippling inflation predicted to hit 7 per cent within a few months.
‘Providers also don’t want to increase their fees to parents but faced with these rising costs and a shortfall in government funding then something has to give.’
A Government spokesperson said, ‘The early years of a child’s life are the most crucial, which is why we have invested more than £3.5 billion in each of the last three years to deliver the free childcare offers, including the 30 hours per week for working parents. We are also investing millions in Family Hubs - where families can access important support services.
‘To support working families more widely, we also recently announced the biggest ever increase in the National Living Wage since its introduction from April 2022 and thanks to the action we’ve taken, unemployment continues to fall with more employees on payrolls than ever before.’