TUC – cost of childcare has risen by over £2,000 a year since 2010

·       Childcare fees have increased by nearly half (44 per cent) for parents with kids aged under 2

·       Union body warns that mums are caught in a “catch 22” with childcare costs soaring and statutory maternity pay falling in real value

·       UK government must provide urgent funding boost for the childcare sector – not slash staffing requirements, says TUC

The cost of childcare for parents with children under two has increased by more than £2,000 a year since 2010, according to new analysis published by the TUC today (Monday).

The analysis shows that nursery fees for under 2s have risen by £185 a month – or £2,200 a year – since the Conservatives took office.

The average annual nursery bill for a family with a child under 2 was £4,992 in 2010.

In 2021, it had risen to £7,212 – an increase of 44 per cent.

Highest childcare fees in the developed world

According to the OECD, the UK now has the second highest childcare costs among leading economies.

And a TUC poll of working parents with pre-school children – published in March of this year – revealed that one in three (32%) spend more than a third of their wages on childcare.

The TUC estimates that parents – with children under 2 – have to work 9.4 hours a week on average just to be able to cover 25 hours per week of childcare at nursery.

This is up from 8.7 hours per week in 2010.

“Catch 22”

The TUC warns that many parents with pre-school children are caught in a “catch 22”.

The union body says the UK’s “miserly” rate of statutory maternity pay is putting financial pressure on mums to return to work early – leaving them to cope with sky-high childcare fees.

At the same time as childcare fees have shot up, statutory maternity pay has fallen in value since 2010.

While average nursery costs have increased by 44 per cent since the Conservatives took office, statutory maternity pay is down by 3 per cent in real terms.

Statutory maternity pay was worth £151.97 a week in 2021/22 – a £5 per week real terms fall since 2010/11.

After 39 weeks statutory maternity pay drops to nothing. This means that if a mum takes the full statutory maternity leave of 52 weeks, they're unpaid for the final 13 weeks.

Urgent funding boost

The TUC is calling for an urgent cash boost for the childcare 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 and available for families.

The union body argues that childcare is a vital part of our economic recovery. Investing in good quality, affordable childcare would support working parents and help the sector recover from the pandemic.

The union body wars that mooted government plans to reduce staffing ratios would damage the quality of childcare services.

TUC General Secretary Frances O’Grady said:

“Childcare should be affordable for all.

“But 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 at the same time as other living costs are shooting up.

“New mums are caught in a catch 22. The UK’s miserly rate of statutory maternity pay means many are under financial pressure to return work early and are then at the mercy of sky-high childcare fees.

“We urgently need to get wages rising to stop households drowning in bills.”

On the need to invest in the childcare sector – not slash staffing requirements – Frances added:

“The government has done little to support the childcare sector – even when nurseries were forced to close during the pandemic.

“Cutting staffing ratios is the last thing we need. It would just put more pressure on underpaid and undervalued childcare workers.

“We need a proper funding settlement for early-years childcare that delivers decent pay and conditions for the workforce and high-quality care.”

Ellen Broome, Managing Director of Coram Family and Childcare, said:

"Coram Family and Childcare supports the TUC's call to make childcare affordable and available for all families. Good quality, affordable childcare is key social infrastructure that both supports economic recovery and boosts children's development while narrowing the attainment gap.

“Universal Credit should be reformed so that parents, especially mothers, are not locked out of work or left financially worse off by working.

“Families are facing ever rising childcare costs and many are under intense financial pressure. We want the government to re-allocate the billions of pounds in underspend from the Tax-Free Childcare scheme to ease the burden on low-income families."

 ENDS

Notes to editors:

Methodology:

Childcare costs are based on data from the Coram Family and Childcare. The number of hours a parent would have to work to pay for 25 hours of nursery is the cost of childcare divided by the median hourly pay for parent of an under 2 year old in 2021. Hourly pay for parents is taken from TUC analysis of the Labour Force Survey.

The value of statutory maternity pay is taken from government data. Real value is based on CPI and given in financial year 2021/22 prices to bring in line with the time period used for statutory maternity pay. The real value of statutory maternity pay is set to fall further this year.

- TUC national demo 18 June: Thousands of people from across the UK will march in London on Saturday 18 June 2022 to take part in the TUC’s demonstration – culminating in a rally in Parliament Square – to demand government action on standstill wages and the soaring cost-of-living.