Daycare Trust research shows 6% increase in nursery costs

Daycare Trust’s Childcare Costs Survey 2012 was released today. The research, sponsored by Computershare Voucher Services, shows that:

  • hourly childcare costs for a child under two have increased by 5.8%; and 
  • costs for a child aged two and over have risen by 3.9%.

In the same year period, wages have only increased by 0.3%.

Daycare Trust’s research coincides with new HMRC figures which reveal that 44,000 fewer families are receiving help with childcare costs as a result of the Government’s cut to financial support in April 2011. This saw the childcare element of Working Tax Credit cut from 80% of costs to 70% - as a result, the average claim has fallen by more than £10 per week, costing low-income working families who receive it more than £500 per year.  

The survey, conducted between November 2011 and January 2012, asked all Family Information Services in Britain about the cost and availability of childcare in their area. Other key stats revealed that:

  • the average hourly childcare costs now exceed £100 for 25 hours in many parts of Britain
  • the average yearly cost for a child under two is £5,103.
  • Britain’s most expensive nursery recorded this year charged £300 for 25 hours care – £15,000 for the year.
  • Over half of local authorities said that parents had reported a lack of childcare in the last year.

Anand Shukla, Chief Executive of Daycare Trust said: “These above-inflation increases in the cost of childcare are more bad news for families, heaping further pressure on their stretched budgets as wages remain stagnant and less help is available through tax credits.

“Daycare Trust warned that the Government’s decision to cut tax credits would mean that some families found that they were no longer better off going to work once they had paid for childcare. The latest HMRC figures reinforce Daycare Trust’s fear that the loss of this vital lifeline is forcing families out of work and in to poverty.

“Today we are calling on the Government to reverse its self-defeating childcare tax credit cut, and to deal decisively with the childcare affordability crisis for parents by pledging to provide free childcare for all two year-olds by the end of the current parliament.

Daycare Trust’s survey highlights the ever growing gap between working parents and affordable childcare.

Employers can do their bit to support employees by making flexible working a reality and introducing childcare voucher schemes. Schemes are cost neutral for companies to run and allow a basic rate earner to save nearly £1000 per year on their childcare costs.

Computershare Voucher Services fully supports Daycare Trust’s recommendations for improving accessibility to affordable childcare. We have been particularly heavily involved in the plan to extend childcare vouchers to self-employed and encourage entrepreneurship; a proposal that has already seen some Government support.

There have been several articles covering the report which you can read here:

Childcare cost rises 'may make parents quit their jobs' – BBC News

Childcare costs rise by nearly 6% - The Guardian

Childcare costs survey: nursery fees rise by 6 per cent in a year – Nursery World