British Workers Struggle With the Cost of Childcare

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  • Childcare costs can account for more than 35% 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

As parents across the UK prepare for the Easter holidays, new data reveals that 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.”

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