Childcare costs are rising significantly above the rate of inflation in England. According to the latest research childcare costs have significantly increased, with nursery fees costing 77% more in 2013 than they did 10 years ago, even though average earnings remain at a similar level to those in 2003.
The latest survey by the Daycare Trust has found that average nursery costs have risen by 4.2% for children under the age of 2 and 6.6% for over 2’s in the last 12 months. The research also found that child minder costs have increased by up to 5.9%. However, the largest escalation in costs is those for older children, with after-school care costing £49.67 per week, a rise of 9%.
John Woodward, CEO of Busy Bees Benefits said “finding high-quality, affordable childcare is essential for many working parents. Although costs have continued to rise, parents should ensure they are taking advantage of the childcare savings available to them.”
Securing affordable childcare remains a barrier for most parents wanting to return to, or continue to work. There are several childcare funding options for parents to help reduce their childcare costs.
Childcare Vouchers are a government initiated scheme available for working parents to save money on their childcare costs. Available from employers, parents can exchange part of their salary, up to £243** per month, in return for Childcare Vouchers which are then used to pay their childcare provider. Childcare Vouchers can save working parents up to £933** per year, doubling to more than £1,800** if both parents join a scheme.
Childcare Vouchers are used by more than 500,000 working parents and can be essential for employers for retaining and attracting staff. In a recent customer survey by Busy Bees Benefits, a leading Childcare Voucher provider, 1 in 3 parents believe that the provision of Childcare Vouchers influenced their decision to return to work or remain with their current employer after having a family.
The provision of Childcare Vouchers does not only help parents to return to work when their children are very young using nurseries, nannies, au pair’s and child minder’s. Vouchers can be used to pay for the care of older children to be used for before and after school care, allowing working parents to maintain their working hours when children are of schooling age.
All three and four year old children are entitled to 15 hours of free Early Years Entitlement per week for 38 weeks of the year. Parents can use nurseries, pre-schools, child minders and school or nursery classes in independent schools. Access to this free entitlement not only enables parents to save money, it also gives them a choice of where to take their free entitlement, allowing them to access childcare they require to help their children learn and develop.
Support for working parents on low incomes is also available. Low income parents can receive help towards their childcare costs if they work more than 16 hours per week through the childcare element of working tax credits. This offers up to 70% towards the costs of childcare, up to a maximum of £122.50 per week1.
Busy Bees Benefits is part of the Busy Bees Group, the largest childcare provider in the UK, operating over 200 nurseries nationwide. With over 30 years’ experience in providing quality childcare, they understand the importance of parents being able to access affordable childcare. Busy Bees Benefits is currently lobbying the government to provide more help for working parents with their childcare costs by campaigning to raise the weekly allowance from £55 to £75. Raising the cap will make a real difference to working parents, increasing savings to over £1200 per parent, per year**. Busy Bees Benefits has an online petition at the heart of the campaign which can be found at http://epetitions.direct.gov.uk/petitions/31669.
John Woodward said “In our opinion the Childcare Voucher system is the most effective way of helping working parents save money, which is why we introduced it in the first place.
However, raising the cap on childcare vouchers would be a considerable financial benefit for our working families.”
Childcare costs will continue rise due to increases in childcare providers’ overheads and legislation changes. Parents should be aware that these costs need not be a large financial burden on their family as there are money-saving solutions available to make their childcare costs more affordable.
*Daycare Trust Childcare Costs Survey 2013 - http://www.daycaretrust.org.uk/data/files/Research/costs_surveys/Childcare_Costs_Survey_2013.pdf
** subject to individual circumstances
1 – For one child, £210 for 2 or more children. Subject to individual circumstances.