Cost of nursery places like ‘second mortgage’
The cost of nurseries has almost doubled over the last decade, with a full-time place setting back families an average of £11,000 a year, according to a report.
The report, by the Daycare Trust and the Family and Parenting Institute, says fees are approaching the levels charged by private schools, with the burden like a “second mortgage”.
The cost of childcare varies widely across Britain and can reach as high as £42,000 a year for a full-time place at one London nursery, more expensive than boarding at a top public school such as Charterhouse.
In London, average nursery fees are £14,000 a year for a full-time place.
The report says that in the last year the average nursery cost for a child aged under two has increased at an above-inflation rate of 4.2 per cent, to around £106 a week for a part-time place at 25 hours a week.
Costs for children aged over two have increased at an even faster rate of 6.6 per cent annually to around £104 a week for a part-time place.
‘Increasingly difficult’
Anand Shukla, chief executive of the Daycare Trust and the Family and Parenting Institute, said: “The survey makes clear that, from a parent’s perspective, costs are increasingly difficult to manage which is a finding that should concern us all.
“Families are being expected to pay more for their child’s nursery place – an average of £14,000 per year in London – than the fees for many private schools, and this cannot continue.”
The report blames “market failure in our childcare system” for the rise in costs, with a lack of suppliers to meet demand in some areas.
The vast majority of nursery care is delivered by the private and not-for-profit sectors in England.
Staffing costs
Staffing costs are the biggest expense. Salaries are not high, but regulations on carer/child ratios make nursery care expensive, although the government has announced plans to modify these ratios.
One of the ways the government helps parents with costs is a voucher scheme available through employers which allows mothers and fathers to pay for childcare out of their pre-tax wages.
Basic rate taxpayers can pay for up to £243 of childcare a month with the vouchers.
In addition, parents of three and four-year-olds are entitled to 15 hours of free nursery care a week. Parents of some two-year-olds also receive assistance.
There is also help through the tax credits system.