‘We’ve had to cut back on the groceries’: How rising childcare costs are impacting families

With childcare costs estimated to be rising at double the rate of inflation, Sophie Gallagher speaks to parents who are struggling to make ends meet

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When Aranda Rahbarkouhi’s childcare bill arrives every month she knows it’s going to leave a serious dent in her bank balance. The 40-year-old mum has one son, Cyrus, 3, and lives in north-east England. Her and her husband spend more than £1,000 a month on childcare; even if Cyrus is unwell or they go away on holiday, they are still liable for the cost.

“It has cost an arm and a leg,” Rahbarkouhi tells The Independent. “It has meant we have not been able to do anything in our home and holidays are now few and far between. There have been some months when we have also had to cut back on the grocery shop to afford the fees.”

Rahbarkouhi says particularly around the Christmas period the family find it “tough” to juggle the cost of the five days a week childcare alongside their other outgoings. Although she says she thinks the money is worth it for her son’s early-years education – and allowing her to go back to work – she says it isn’t without tough financial compromises.

The cost of childcare in Britain has risen 5 per cent in the last 12 months according to a report by Coram Family and Childcare Trust, which produces a comprehensive annual survey of the industry. The spiralling cost is now double the rate of inflation and families are on average paying £131.61 a week or just over £6,800 a year for a part-time nursery place (25 hours a week).

Not only that, but if they live in a more expensive region they could be paying much more; London sees families part with £165 a week (£8,580 a year) compared to £116 (£6,032) in the West Midlands and £113 (£5,876) in Yorkshire and Humberside.

Ivana Poku, 36, from Welwyn Garden City, suffered with “major” postnatal depression after the birth of her twin sons, Henry and Mason, 3. Poku says that she believes the high cost of childcare was one of the reasons she didn’t get better sooner. “This is a big problem for most new mums – they are forced to stay at home with no support, which can easily lead to mental health issues.

“With no family living around and a husband coming home late from work, I was isolated and desperately needed some support. I am convinced that if I had had an option to have more hours of childcare – which would also mean more break for me – I would have not needed to suffer to that extent,” she explains.

Most families in England and Wales can get some financial support with childcare costs – the government provides up to 30 hours free childcare (1,140 hours per year, which you can choose how you take), but this is only between the ages of three and four.

The childcare also must be with an approved provider and stops as soon as your child is in reception class (or reaches compulsory school age). You will also still have to pay for extras such as meals, nappies or class trips.

As well as only applying to children of a certain age, the Coram Family and Childcare Trust says that the system is “too complicated”, leaving parents out of pocket.

“In England alone there are seven different ways that families can get support with their childcare costs, each with different eligibility criteria, which can leave parents at risk of missing out on the support they are entitled to," says Claire Harding, head of the trust. “Good childcare is essential: it enables parents to work and boosts children’s learning. But for far too many families in the UK, it just isn’t working.

“Recent government investment is welcome, but many families still face crippling costs, especially in the period from the end of parental leave to when a child turns three. There are seven different types of childcare support depending on families’ individual circumstances, and many parents find it difficult just to find out what’s available to them.”

Matt Richards, a 52-year-old dad from Plymouth, works away from home in London or Bristol five days a week and says the cost of sending his four-year-old daughter to nursery for three of those days is “difficult”. “It costs us £112 per week (around £450 per month) excluding fuel bills,” he says. “I’m fortunate that I’m a high earner, but I have to travel away to earn the money we need so it’s swings-and-roundabouts.”

Even with his mother-in-law contributing to costs and paying for one week per month the family still finds childcare a burden, saying that the biggest impact is “not being able to save for the future” which he finds concerning given he and his partner, 43, are “older parents”.

“I think friends do feel it [but] most of the other parents are younger, so they aren’t so concerned about the future and getting older. But for me it’s so much closer than them and I can feel old age creeping over the horizon. Paying for childcare now means less being put away for old age. It’s a vicious circle, although I know it’s one we’ve chosen.”

Rachel Carrell, who runs childcare centre, Koru Kids, explains that the reason why childcare costs are so expensive to families is because of low subsidies from the government: "European parents, in places like Denmark, Germany and France, enjoy hugely subsidised childcare. In the UK, we don’t. It’s not that there aren’t any subsidies at all – there are some – but they’re incredibly confusing, and takeup has been really low.

"Last week it was revealed that almost a million families are missing out on their entitlement to ‘taxfree childcare’. Anyone who has tried to use the taxfree childcare system has a story about how difficult and annoying it is to actually get your hands on the subsidies you’re entitled to."

As well as this, Carrell explains, the UK sector is high-regulated which makes it expensive. "Britain has one of the most regulated sectors in the world, with tight rules around nursery ratios and Ofsted overlooking everything – this is great where it ensures quality but the cost of it falls almost entirely on parents," she adds.

The childcare survey 2020 says if the government is serious about making childcare more affordable, it should make changes including extending the 30 hours of free childcare for three and four year olds in England and Wales to families where parents are in training, to help parents get better jobs.

The trust also suggest doubling the early years pupil premium, to boost outcomes for the most disadvantaged children and relocating any budget underspend to other parts of the childcare system – and focus this on the most disadvantaged children.