Employment

Poorest parents spend three times more on childcare than the richest

With childcare vital for three in four parents to be able to work, the burden of costs on low income parents is holding back social mobility, a report has found.

Lower-income families spend three times as much on childcare as the wealthiest. Image: Yan Krukov / Pexels

Parents with the lowest incomes are having to spend three times as much on childcare as the richest, new research has found. 

The poorest parents spend 17 per cent of their household earnings on childcare, compared to 5 per cent for the wealthiest.

And of those in the poorest income band, one in three are in “childcare poverty”, meaning they spend over 20 per cent of their household income on childcare, the Social Market Foundation(SMF) found.

The research, commissioned by the Commission on Childcare made up of Conservative and Labour MPs, found over half of parents with the lowest household incomes (less than £10,000) and children under five are paying for some sort of formal childcare.

Affordable childcare is vital for parents to progress with their careers and one of the key factors preventing gender equality, said Scott Corfe, research director of the SMF.

“It is imperative that the childcare market is fixed,” he said. “Low-income families should not have to spend such a large portion of their income on it, and parents should not have to sacrifice their careers for it.”

“Britain urgently needs solutions to prevent the childcare poverty gap from widening with the cost-of-living crisis.”

More than three quarters of parents must pay for childcare to be able to work, recent research from Pregnant then Screwed found. Over the school holidays it will cost the average family almost £900, with four in 10 parents having to take unpaid leave to look after their children in a bid to cut costs. 

The government has recently revealed its drive to cut the cost of childcare by increasing the number of children people are allowed to look after. By increasing the ratio from four two-year-olds looked after by one adult to five, the government hopes to reduce the cost of childcare by up to 15 per cent.

But providers have branded the plans dangerous, fearing the added workload could cause nursery staff to become exhausted and lead to childcare providers quitting over burnout. 

The Department for Education hopes to encourage more people to become childminders by reducing the cost to train as a childminder and allowing those who have qualified greater flexibility over where they work. 

Joint chair of the commission, Labour MP Siobhain McDonagh, said: “These shocking findings expose the urgent steps that need to be taken by the Government to close the inequality that is the cost of childcare poverty gap.”

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