New research from smart money app Plum has laid bare the painful choices parents are having to make in the wake of spiralling childcare bills.
Close to two out of three parents (63%) are reconsidering whether or when to have another child in the face of these high costs.
The study of UK parents with children aged 0-4, conducted on behalf of Plum by Research Without Borders, concluded more than a third (37%) have found it so difficult to afford childcare that they wouldn’t have another child.
A further quarter (26%) would wait longer until having another child due to the cost, showing starkly how financial pressures are impacting life choices.
The research also showed the impact the cost of childcare is having on the workplace:
- Two out of three (64%) parents say it has affected their family’s working habits.
- More than one in three (38%) have reduced hours or stopped working completely due to expensive childcare.
- Meanwhile, nearly three quarters (70%) said they would work more if childcare was available for free.
In light of these challenges, Plum is urging the Government in an Open Letter to prioritise childcare and deliver more comprehensive support for early years education.
Rajan Lakhani, Head of Money at Plum, comments: “As a parent of two young children, I have seen first-hand the challenges people are facing with the cost and availability of childcare and the financial impact on working families. It’s also something our customers here at Plum are finding very hard to navigate, as many of them are parents”.
“Our research has found that extending free childcare would help a large majority of parents either return to work or increase their hours. Getting these parents back into work could be key to boosting Government revenues at a difficult time for the country’s finances”.
Financial burden
With the majority (69%) of parents with children aged under 5 using some form of paid childcare, this is an issue which affects families up and down the country. 1 in 5 (19%) are currently paying £800-1200 a month on their paid childcare, with a substantial percentage (10%) spending more than this.
These costs are set to increase further: more than three quarters (77%) of parents have seen their childcare fees recently increase, or expect their fees to increase soon. Meanwhile, 70% stated that childcare entitlement and allowances are inaccessible and/or confusing, making it difficult for parents to make full use of it.
Impact on family life
While some financial sacrifice is an expected part of family life, more than 2 out of 3 parents (69%) are now having to cut costs to afford childcare. This includes having to reduce essential spending as well.
Almost a third (32%) are cutting the cost of their grocery shop, and a similar amount have cut down on savings and investments, putting their financial resilience at risk during a cost of living crisis. 1 in 10 (9%) have even had to spend less on their pets due to childcare costs.
Today, Plum has published its Open Letter to the Government, outlining the company’s proposals for improved access to affordable childcare signed by:
- Rajan Lakhani, Head of Money, Plum
- Purnima Tanuku OBE, Chief Exec, National Day Nurseries Association
- Adrienne Burgess, Joint CEO, The Fatherhood Institute
- June O’Sullivan, CEO, London Early Years Foundation
- Kate Dyson, Founder, The Motherload
Rajan Lakhani added, “Juggling childcare expenses with other cost of living pressures leaves us having to make very difficult choices. It’s deeply shocking that as a result, parents are reconsidering having more children, or are having to cut back on essential spending like groceries and utilities.
“The current situation is just not sustainable. Together with our customers and notable voices from across the industry, we’re urging the Prime Minister to act urgently on this issue and properly help families.”
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