Childcare spending nears £8k a year but price rises are slowing, report reveals

Families are typically spending around a quarter of their household income on childcare, according to a report.

Mothers and fathers are now forking out almost £8,000 a year on care for two youngsters - and often paying out more per week than they do on their weekly shopping.

But there are signs that the steep increases in childcare costs of the past are slowing down, with average prices rising roughly in line with inflation this year, the Family and Childcare Trust study concludes.

The report is based on information gathered from local council family of children information services in England, Wales and Scotland. Each authority was asked to give the cost of 25 hours and 50 hours of childcare as provided by nurseries and childminders. They were also asked to give figures on the average cost of 15 hours' childcare in an after-school club, and for a childminder picking youngsters up from school.

It found that a family with one child under two in part-time childcare and another aged five at an after-school club can now expect to shell out £7,933 a year for care. This is more than a quarter of a working family's typical annual household income of around £28,000, the Trust said, adding that this also represents a third of the median gross salary of a nurse and 22% of a soldier's typical wage.

The study also calculated that the average weekly cost in Britain of an under two-year-old spending 25 hours at nursery now stands at £116.77, up 1.1% on last year, while for a child aged two or over it is £111.88.

A two-adult household with children will spend around £77.90 a week on food and non-alcoholic drinks, according to Office for National Statistics data.

The report does conclude that when prices are weighted to take into account population distribution, part-time nursery places for under twos fell by 0.3% last year, while the cost of a childminder for a youngster of this age rose roughly in line with inflation.

A breakdown of the Trust's figures shows that the average 25-hour nursery cost for an under-two is £118.13 in England, £111.13 in Scotland and £110.16 in Wales.

London has the highest weekly prices across England at £158.73, while Yorkshire and Humberside has the lowest at £97.42.

For children aged two and over, 25 hours at nursery now costs £113.06 a week on average in England, £104.06 in Scotland and £109.07 in Wales. London again has the highest prices in England at £148.74, with Yorkshire and Humberside the lowest at £93.60.

The study also found that more English councils are reporting a lack of free places for three- and four-year-olds - currently eligible for 15 free hours a week, a figure due to double to 30 hours under Government plans.

In total, 59 authorities said they have a lack of places, compared to 23 last year and the Trust estimated that around 41,300 three-year-olds are missing out on free early education in England.

Just under half (45%) of councils said they have enough childcare for parents who work full time, the report also found.

The Trust's chief executive, Julia Margo, said: "Parents will breathe a sigh of relief that childcare costs have only risen in line with inflation over the last year.

"But we are very concerned that thousands of three-year-olds are missing out on existing entitlements before the expanded 30 hours of free childcare is even piloted. Extra free childcare is of no use to working parents if they can't find a place for their child. To make childcare really work for parents, we want to see the right to an early education place brought in line with the right to a school place."

Neil Leitch, chief executive of the Pre-school Learning Alliance, said:"We warmly welcome the news that childcare costs have risen in line with inflation, a clear reflection of the sector's commitment to deliver quality but affordable childcare to families despite the financial pressures they themselves continue to face.

"It is, however, extremely concerning that local councils are increasingly struggling to provide sufficient funded places.

"This is a problem that will only worsen with the roll-out of the 30-hour scheme - many providers have warned that they simply will not be able to deliver the extended scheme, not only due to lack of funding, but also a lack of available places."

Childcare Minister Sam Gyimah said: "It is vital parents are able to access high-quality affordable childcare and this report shows there is record support available.

"For the first time in a decade, costs are stabilising and there are rising numbers of places on offer.

"Latest figures show 7,000 more providers are offering the universal 15 hours offer with 1.3 million children - the vast majority - taking it up. Rising numbers of disadvantaged two-year-olds are also benefiting."

Shadow childcare minister Jenny Chapman said: "The Tories' childcare plans are in disarray with the vast majority of areas now facing a shortage of places for three and four-year-olds and a funding shortfall of half a billion.

"This lack of childcare places is continuing to drive up costs for parents, with families in some parts of the country now faced with paying over £150 a week for a part-time nursery place."