- Childcare costs can account for more than 35 per cent of salaries in the UK
- Parents in the South of England are hardest hit
- Welsh parents see the steepest rise over the last five years
Childcare costs now take up a third of salaries, according to Hay Group’s latest PayNet UK Salary Tracker.
In some cases, childcare can account for more than 35 per cent of annual salary.
As childcare costs continue to increase, while wages have remained stagnant, parents are now spending a significantly higher proportion of pay on childcare than five years ago.
Adam Burden, reward information consultant at Hay Group comments: “UK workers are feeling the pressure of juggling careers with family life, and with household budgets continuing to feel the squeeze, the rising cost of childcare presents another serious strain.”
Hay Group’s PayNet UK Salary Tracker analyses pay and salary movements across five different employee levels in over 700 organisations, representing over 1 million employees. Childcare data is based on the weekly cost of 25 hours of childcare for children under 2 years old, from the Daycare Trust ‘Childcare Cost’ annual survey.
State of Play
Clerical level workers1 in England will spend on average £103.19 per week on childcare in 2012, representing 34.8 per cent of an individual’s salary. In Scotland, parents can expect to pay £101.49 a week (34.1 per cent of salary), and in Wales, the figure rises to 34.2 per cent, or £92.35 weekly.
Parents at this employee level in the South East of England are hardest hit, spending 35.5 per cent of their £336 weekly wage on childcare in 2012.
Those in the South West will spend almost as much (35.3 per cent of a £303 weekly salary) and Londoners only slightly less again (34.2 per cent of the average £371 wage).
The least impacted region is the North West, though even here, parents can still expect to spend a considerable 28.9 per cent of their £318 weekly earnings on childcare.
Even for those in Professional level roles2, childcare costs represent close to a fifth (18.3 per cent) of average earnings in England, as childcare costs totalling £103.19 eat into average earnings of £565.
Scottish professionals can expect to pay out 17.5 per cent of their £580 earnings on childcare, while parents in Wales face costs of £92.35, or 16.8 per cent of their £550 earnings.
Growing Pains
For clerical level workers, childcare costs have risen considerably over the past five years.
Parents are spending on average 4.7 per cent more of their wages on childcare than they did five years ago.
Parents in Wales have felt the most acute pinch, spending 6.5 per cent more than in 2007 – the highest rise anywhere in the UK.
The Nanny State?
Despite rising childcare costs eroding disposable incomes, less than half (46 per cent) of UK employers currently offer any form of childcare support. Of those that do, the most common benefit is childcare vouchers (35 per cent).3
Adam Burden comments: “Employers need to consider ways to help their workers with mounting childcare costs to ensure they attract and retain talent regardless of their childcare needs.
“Firms should consider offering childcare vouchers, flexible working and creative benefits, such as an onsite nursery, in addition to subsidised childcare. These can make a vital difference for employees with children.”
The UK has the highest childcare costs in Europe with little help for those on medium incomes (those this Government seem to be hell bent on punishing at every opportunity it seems).
Encouraging businesses to provide childcare facilities onsite (business parks could band together) and offer training in childcare for return to work mothers would help, as parents would be happy (close to child) and felt employer cared. Employer happy as happy workforce willing to work additional hours if cover provided. Government could provide grants to organisations who provided this to aid set up costs etc..
Just an idea…
Where do you get these figures from – I’d like to live there!
From my experience a very average nursery in a very average town will charge around £40/day for an over 2-yr-old and probably around £45/day for under 2s. If you work 3 days per week that’s a minimum of £120 for childcare, and if you are on a fairly usual rate of pay for a clerical worker you can expect to earn around £230/week gross for a 3-day week. Once NI contributions and tax come out of that, childcare costs are closer to 70% of wages, and become a major headache for family finances.
The figures above look suspiciously based on part time childcare costs as a percentage of full time wages.
I fail to see why this is solely an employers problem, or even the governments!? People in the UK seem so quick to blame others for a perceived injustice or inequality. Simple solution, don’t have children. Or only have those that you can afford. Or better still, maybe peeved parents should group together and open a nursery to combat these pricey nemeses’. If its 35 – 70% of every persons normal salary it seems a quick way to make an easy buck. Plus, as an added bonus, no need to ever have to pay nasty childcare charges to people that protect and look after our children while we go off to the office to relax ever again!
It must be remembered that this is what is being spent on child care by Clerical staff/week and not what childcare costs for a 5 day week.
Many Clerical staff work short weeks or have family cover for part of the week. Nor does it identify the type of childcare provided. A survey can become irrelevant and misleading if the datum or base product are not comparable ie the individuals degree or type of child care is not the same.
That said if you want kids and still want to carry on working this is the price you have to pay for a good safe, regulated standard of chilcare.
You cant have your cake and eat it.
Helen – I’m guessing you don’t have any children or intend to have any either!
Can I pick you up on a few things
1) If everyone decided “not to have children” then this would lead to an aging population. Granted, those in their 70’s and 80’s would still be able to work till they dropped down dead. Japan is facing this prospect and this could lead to their economy shrinking…hardly good for business and wouldn’t this affect the employer and the government? http://www.economist.com/blogs/dailychart/2010/11/japans_population
2) Some mothers do provide childcare (in their own homes etc) – still charge £40 or so as need qualifications / safety certificates, police checks etc to be able to do so which is costly for a person starting out in that field. Also need to be inspected to ensure they are providing a suitable and sufficient environment and following national curriculum with regards to education. Salaries for nursery staff aren’t that good either (even for those with the full qualifications).
c) Sweden has been heralded as having one of the best childcare systems in the world. Privately owned…no. Most of theirs is Government funded.
http://www.guardian.co.uk/society/2008/mar/11/children
Maximum fees implemented and the government means tests those who have children ensuring those who can afford to pay can, those that can’t (on low income etc) get the help. Their literacy rates are higher than ours so they must be doing something right unlike in the UK where there is no upper limit to the price nurseries can charge and most are in the private sector.