Childcare costs rising by more than twice the rate of inflation

Average cost rose by 6% last year and a nursery place for a child aged two or under is 77% more expensive than in 2003

Childcare costs in Britain are rising at more than twice the rate of inflation and have increased over the last 10 years, despite average earnings falling back to 2003 levels, according to research .

The Childcare Costs Survey 2013 found the average cost of childcare rose by 6% last year against a backdrop of 2.7% inflation, stagnant wages and increases in working tax credit payments, including the childcare tax credit, being pegged at 1%.

Anand Shukla, chief executive of the Daycare Trust, which produced the report, said: "It's a massive financial burden … childcare costs for many parents can be higher than their rent or mortgage payments. We know many parents go into debt or put it on their credit card."

A nursery place for a child aged under two rose by 4.2% last year compared with the previous 12 months to £4.26 an hour on average, equivalent to £106.38 a week for a part-time place (25 hours) and £11,000 a year for a full-time place, according to the survey. That makes a nursery place for a child aged two or under 77% more expensive in real terms than it was in 2003. For the over-twos, the yearly increase was 6.6% to £103.96 a week for a part-time place.

The steepest price rises were for childcare for older children, with 15 hours a week at an after-school club costing £49.67 on average, a rise of 9%.

For a family with two children, care in term time, before and after school, costs around £4,000 a year, according to the report. It says the cost of after-school clubs has risen on average by 88% in real terms over the last 10 years.

The government plans to make childcare less expensive by relaxing the number of pre-school children that nurseries and registered childminders can oversee but the report suggests that reducing the required ratios may diminish quality and have little effect on costs.

Shukla called on the government to simplify the funding system and extend the entitlement of 15 hours of free childcare to cover all two-year-olds and then increase the number of free hours in steps, first to 20 and then 25.

Currently the entitlement is available to all three- and four-year-olds but only 40% of two-year-olds.

A government spokesman said ratio changes would offer flexibility to providers. "High quality providers will be able to expand and more childminders will enter the market – this will mean parents have more affordable childcare."

Contributor

Haroon Siddique

The GuardianTramp

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