London parents are feeling the pinch of sky-high childcare prices, with an enormous 71% of parents in the capital saying that they’ve had to cut back on their spending to pay for childcare according to new research from personal finance comparison site finder.com.
63% of parents in London also said they’d had to take time off work or reduce their paid hours to look after their children as the costs of childcare were too high. Again, this was more than any other region of the UK, and was followed by Northern Ireland (41%) and the West Midlands (40%). At the other end of the spectrum, those in the East of England had the lowest percentage of parents having to take time off work to look after their children, with 27% of parents in this region having done so.
It’s no surprise that those in London are struggling, with the average parent in the capital found to be shelling out £10,268 per year on childcare. This is almost 5 times higher than the region with the lowest annual spend – the South West of England, where the average is £2,154.
As the average wage is higher in London, parents in this region were also found to be losing the largest amount from their salary when reducing their paid hours to look after their children. Those who said they had taken time off or reduced their paid working hours to care for their children were losing just over £12,300 on average from their annual income after taxes.
The survey found that rising childcare costs have forced over a third (37%) of parents in the UK to reduce their working hours or take time off work to take care of their children. Along with the damage this could have on these parents’ careers, those who reduced their working hours also saw their income after tax reduced by an average of just under £9,000 a year.
The research showed that the average parent in the UK spends almost £5,000 a year on childcare, which is almost a fifth (19%) of the average UK salary after tax. However, the research also revealed that almost 1 in 5 parents (18%) are spending more than £10,000 a year on childcare in the UK – a significant 38% of the average UK salary after tax.
The study revealed that around 6.9 million parents (47%) in the UK have had to make spending sacrifices due to the high cost of childcare. The most common sacrifice parents are making is eating out in restaurants, with almost 1 in 5 (19%) cutting down on this activity in order to pay for childcare. This was closely followed by going on foreign holidays and putting money into savings (both 18%).
Worryingly, around 1.2 million parents in the UK (8%) have had to cut down on essential spending, such as food or heating, in order to cover the high costs of childcare, according to the research.
Liz Edwards, editor-in-chief at finder.com, said, “These findings suggest that many people could effectively become priced out of parenthood in the current economic climate.
“Now more than ever parents will be feeling the pressure to go to work and earn more money to help cover these extra costs. However, the current cost of living crisis combined with the soaring price of childcare makes this extremely difficult for those who can’t rely on family and friends to pitch in with looking after their children.
“The government has announced that it will be extending the scheme which offers some families in England with children between 3-4 years of age 30 hours of free childcare a week (different schemes operate in Scotland, Wales and Northern Ireland).
“The new scheme will offer 15 hours of free childcare to eligible 2-year-olds from April 2024, and 15 hours to those aged between 9 months and 2 years from September 2024. Given the current childcare crisis the UK is facing, these changes cannot come soon enough.
“If your children will fall within these age brackets next year, make sure you have these dates marked in your calendar to start reaping the rewards. To be eligible, your household income must be at least £152 a week but less than £100,000 a year.”