Childcare costs are having a strain on mothers resulting in them leaving the workplace, according to figures from the Institute for Public Policy Research (IPPR).

The number of women out of work has risen, despite unemployment levels falling,. The IPPR has partly attributed this increase to the cut in childcare tax credits, coupled with the high cost of having children looked after.

Dalia Ben-Galim, IPPR Associate Director, said: “Cuts to childcare tax credits mean that for some women, work no longer pays and they are better off staying at home.”

The Organisation for Economic Cooperation and Development (OECD) has found that Britain is one of the most expensive countries in the world when it comes to the price of supervising children. It costs an average £97 a week for 25 hours of care, which increases to £115 a week in London and the South East.

Julian Foster, Managing Director of Computershare Voucher Services, said: “The cost of a nursery place for a child aged over two has risen twice as quickly as wages, according to the Daycare Trust, which found fees to have increased by 4.8 per cent since last year, meaning any savings available for families will be more important than ever.”

He points out that the expense of having children looked after is one of the biggest family costs. Coupled with other financial pressures, parents should ensure that they are taking advantage of savings they could be making, such as through the use of Government-backed childcare vouchers.

“Childcare vouchers are non-taxable and are exempt from National Insurance (NI), so for a family, they can mean savings of up to £1,866 a year,” commented Foster.

The IPPR has called upon the Government to reform the welfare state in order to provide universal childcare for all children so as to encourage full employment.