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Parents spend nearly a fifth of their salary on childcare, according to a new report.
The Childcare Affordability Report reveals a parent paying for 25 hours of care a week can expect to pay £4,993 a year, which is equivalent to 18.9 per cent of average earnings.
The report by children’s savings provider Family Investments, found there are significant disparities in childcare costs at a local level.
Stoke in the West Midlands was found to be the most affordable urban area and a parent paying for 25 hours care a week would need to set aside just 13.7 per cent of their income or £2,925 over the course of the year.
By contrast, care costs in Ebbw Vale, South Wales are equivalent to 28.2 per cent of a parent’s earnings or £5,539 a year.
Kate Moore, head of savings and investments at Family Investments said: “Family Investments has developed the Childcare Affordability Report to provide parents with detailed information on a critical issue. Sixty five per cent of families regularly pay towards their children’s care to enable parents to continue working. Across the country, these costs now equate to 18.9 per cent of the average parent’s earnings, meaning that parents effectively spend a fifth of their time working towards meeting care costs.
“Childcare has emerged as an important policy issue in recent months but the debate so far has focused on the national picture. The lack of correlation between local earnings and childcare costs highlighted in our report is stark. We urge those currently looking at childcare provision to investigate this disparity and identify whether more needs to be done to encourage greater provision, competition and ultimately greater affordability of care.
She added: “Regardless of whether a parent works as a result of financial necessities or because of lifestyle considerations, employment should offer parents the ability to provide a financial safety net for their family. At a time when the overall financial burden parents face is increasing, employment should allow them the ability to save towards the future and provide for some of life’s major costs such as higher education. It is therefore only reasonable that care costs are fair and allow parents to achieve this.”
The survey found the West Midlands is a hotspot for childcare affordability.
Four of the ten most affordable urban areas are located in the region. The North West of England also featured prominently with three of the most affordable locations in the top ten with Bolton ranked third overall.
Neath in West Glamorgan is the most affordable location in Wales and while Scotland did not feature in the top ten, Galalshiels in the Borders ranked 12th overall with a parent needing to set aside 16.5 per cent of their earnings to cover care costs.
The Coalition Government recently announced it plans to set up a childcare commission led by education minister Sarah Teather and work and pensions minister Maria Miller. As well as cutting the costs of childcare, it will explore ways to increase the supply of places and offer ‘wrap-around care’ for over-fives during out-of-school hours and holidays. For more information on the commission go to: www.daynurseries.co.uk/news/article.cfm/id/1557278/childcare-commission-to-be-launched-by-coalition