Cost of childcare up nearly 4 times faster than wages in the North East, says TUC

The cost of childcare for young children has risen 3.6 times faster than wages in the North East since 2008, according to new analysis published by the TUC today (Friday).

The analysis reveals that in the North East the average wages of those with a one-year-old child rose by 17% in cash terms – although pay is still falling in real terms – between 2008 and 2016. However, over the same period, childcare costs shot up by 62%.

London – where childcare has risen 7.4 times more quickly than pay – has seen the biggest increase in childcare costs compared to wages, followed by the East Midlands (7 times), and the West Midlands (4.8 times). The average increase across England is 4 times.

While there is government support for childcare for children aged two and older, most working parents with one-year-olds do not get any state help with childcare costs.

And as around 950,000 working parents across the UK have a child aged one, these rising costs have huge implications for family budgets, warns the TUC, as parents are spending an increasing portion of their pay on childcare.

In the North East:

• A single parent working full-time with a one-year-old in nursery for 21 hours a week (21 hours is the median amount of childcare used per week for pre-school age children) spent 21% of their wages on childcare in 2016, up from 15% in 2008.

• One parent working full-time and one parent working part-time with a one-year-old in nursery for 21 hours a week spent 14% of their salary on childcare in 2016, up from 10% in 2008.

• Two parents working full-time with a one-year-old in nursery for 21 hours a week spent 11% of their wages on childcare in 2016, up from 7% in 2008.

The analysis also shows pressure is even greater on parents working full-time, especially single parents. A single mum or dad in the North East with a young child in nursery for 40 hours a week would need to spend more than two-fifths (41%) of their pay on childcare – showing how difficult it is to balance work and family life without working fewer hours or getting support from friends and family.

TUC Regional Secretary Beth Farhat said:

“The cost of childcare is spiralling but wages aren’t keeping pace. Parents are spending more and more of their salaries on childcare, and the picture is even worse for single parents.

“Nearly a million working parents with one-year-old kids have eye-watering childcare bills. There is a real gap in childcare support for one-year-olds until government assistance kicks in at age two.

“Parents need subsidised, affordable childcare from as soon as maternity leave finishes to enable them to continue working, and so mums don’t continue to have to make that choice between having a family and a career.”

To address this increasing pressure on working families, the TUC would like to see:

• Universal free childcare from the end of maternity leave. This would help single parents and families – especially younger mums and dads with less seniority and lower pay – to stay in work and progress their careers after having children.

• More government funding for local authorities to provide nurseries and child care.

• A greater role for employers in funding childcare. Either through direct subsidy to employees or the provision of on-site childcare facilities