Let’s talk about childcare costs...

[SweetSouls]

I’ve recently been looking at local childcare costs, to see how feasible having a baby would be. I live in outer London, which I acknowledge is expensive.

All of the local nurseries are £90-100 per day (>£100 per day if you do less than full time).

This means my childcare cost for one child will be around £2,000 per month.

I’m feeling a little frustrated by the enormity of the cost, and the minimal support which the government will provide to working parents.

If prices continue to rise above inflation, we can’t be too many years off the very, very vast majority of parents (and let’s face it, women) left in the position that they have no option but to quit their careers if they want a child.

Why is this not a more pressing topic in the press and government? I know we are a country like the idea of ‘don’t have children if you can’t afford them’ - but if this trend continues presumably no one will be able to afford to have children and contemplate a career, unless they can make it to senior management before they hit 35.

What’s a sustainable way to lower the cost? Providers already seem to struggle to make the numbers work and break even, let alone be profitable. Could the full sum become tax deductible in some way (other business expenses are!).

Have you looked into a childminder, I'm one myself and wecwork out generally cheaper than nursery. Have a look into childcare vouchers from your company (if they do them) there's also the government childcare tax scheme. Childminders are able to accept both as payment

I paid £20 a day - in a large city 20 years ago

The government then brought in subsides to allow woman to return to work, and help pay the costs of childcare up to 85%

All the local childminders upd their prices accordingly and parents didn’t benefit from the scheme

Hence the huge coats now!!

I couldn’t have afforded £2000 a month

Have you had a look at the tax free childcare scheme? It makes a big difference to our nursery bill each month. I keep telling myself it's only for a few years too 😬 easier for me to stomach at £50-£55 a day here though I guess!

Gorbie yes the childminders come in a little cheaper at £8 per hour (£1,500-700 per month).

Still an enormous sum to be paying from your taxed salary.

I don’t think you can get vouchers now - only the £2k tax saving.

Where in outer London are you? It obviously makes a big difference as we're in outer London too and our childminder is £5.50ph, and nursery was £75 a day - which over the course of a month made a significant difference. So do look around; there are big differences in the costs of nurseries in local areas; there was one which was pushing £2k a month near us but then I considered how much I cared about my 9mo learning French and decided it wasn't worth the extra £500 a month 😁.

The way you make it more affordable (in the absence of state help, which is available for low earners) is for both parents to look at condensing your hours (5 days over 4 for example - if you both do it, then it saves you two days childcare), take advantage of the tax free childcare scheme which will save you 20% on your childcare (and if you're only just over the threshold, put more in your pension to bring it back under which is a double advantage), and grit your teeth and get on with it unfortunately; it gets better at 3 as you then get 30hrs free. We had no family help as they either worked or were unavailable due to having died, so we just had to get on with it. It's not forever.

LBOCS2A we too will just have to suck it up and deal with it (similar family situation to you). And I’m fortunate I can afford it without living on the breadline.

I suppose I’m not looking for an immediate solution for me (there isn’t one!), my question is broader - what is going to happen in the next 5-10 years if there isn’t further intervention by the government in this sector?

It’s seems a fundamentally anti-women (anti-family, but mainly anti-women) position to allow childcare costs to spiral so wildly out of control.

Depending on income there is Universal credit which can help with the cost, even people on relatively high joint incomes can qualify if they have high rent and high childcare costs.
I think many people do have to accept that they may need to go part time or change careers and work around each other for a few years whilst children are young. I had four under seven at one point so had to work evenings, weekends and nightshifts around my dh's 9-5 job, so we avoided high childcare costs, but it did take a toll on my health and family life. To be honest most people I know with young kids do this or have family help.
As others have said child minders may be cheaper.

@LBOCS2

Where in outer London are you? It obviously makes a big difference as we're in outer London too and our childminder is £5.50ph, and nursery was £75 a day - which over the course of a month made a significant difference. So do look around; there are big differences in the costs of nurseries in local areas; there was one which was pushing £2k a month near us but then I considered how much I cared about my 9mo learning French and decided it wasn't worth the extra £500 a month 😁.

The way you make it more affordable (in the absence of state help, which is available for low earners) is for both parents to look at condensing your hours (5 days over 4 for example - if you both do it, then it saves you two days childcare), take advantage of the tax free childcare scheme which will save you 20% on your childcare (and if you're only just over the threshold, put more in your pension to bring it back under which is a double advantage), and grit your teeth and get on with it unfortunately; it gets better at 3 as you then get 30hrs free. We had no family help as they either worked or were unavailable due to having died, so we just had to get on with it. It's not forever.

Yes one of my friends is going back to work shortly in a well paid job and will be condensing to full time work over four days.

Childcare should be a joint cost that both parents contribute to
There is tax free childcare which will reduce your bill by 20% and 30 hours at three, so it’s only an issue for 2 ish years, presuming you have one child

It's supply and demand though? So presumably there are sufficient parents in your part of London who can afford to pay those fees (nearly twice what they are where I live - commutable to London) i.e. they earn more, or are prepared to take the hit for a couple of years so as not to have a break in their career. Or they've saved in advance. Remember the big expensive period is fairly short - many women take a year's maternity leave now, and free hours kick in at age 3, which makes childcare much more affordable. So only a couple of years to pay at top price.

Just don’t have twins, the costs are devastating. The only twin mums I know who’ve gone back to work before their twins are 3 have family to care for their kids at least some of the week.

Our twins only went at 2 for 11 hours a week because they received DLA and therefore got the free hours at 2. We also got some help through child tax credits with costs over those hours when we increased it. That depends on income obviously - IIRC we both had to be working more than 16 hours a week for them to take childcare costs into account. When I was working 12 hours a week (flexible and from home) we didn’t get any extra from tax credits but once I increased my hours it covered a fair chunk of the cost. This is dependent on household income though, and of course now you’d have to apply for UC and if you have savings over the threshold you won’t qualify. There is the tax free childcare scheme though.

Yes, I would say that is the at high end of childcare fees. I lived in zone 4, commuting into London when I was paying for nursery/childminder. Nursery was about £60/day and childminder £50/day. Still expensive though, I agree. It was like a second rent or mortgage payment in terms of financial impact. I condensed hours so we only needed 4 days, and I got a day at home with kiddo. This was only a few years ago.

But as others say, it’s only for a short time. The 30 free hours made a huge difference, literally halved the cost. Then once they’re at school it’s only wraparound care, if you need it, which is marginal by comparison.

You’re right though, even though it’s ‘only for a short time’, if that short time is completely unaffordable then you’re a bit stuck.

Make sure you shop around. We are in zone 3 and looked at 4 nurseries. From the 3 we liked the cheapest was £1295 a month and the most expensive was £1525 per month (for a full time place).

We are about to move to zone 4 and similarly there has been a variety of prices between 1400 and 1700.

We pay £70 per day in Cornwall. My daily after tax salary is £86. My DPs is £95. We don't get much help because we own our house.

Our nursery is around £50 per day which I still feel is expensive, but it's a bit more manageable when using tax free childcare as that saves me around £200 per month. Are you using tax free childcare?

Where are you?? My daughter goes to a Dulwich nursery so to not the cheapest around but it's "only" £75 for a long day and £55 for a school day. Childminder previously was about the same, there were cheaper ones just didn't have spaces. Working part time for me and compressed hours for DP helps a lot and then there's tax free childcare

just don’t have twins I’m not sure it’s a choice, sink!

I don't know the answer tbh, because as you said it affects women so much more than men, but I am actually amazed it's not more money.

These people look after your children for a full day, for what £5 an hour?! The keep them safe, they're qualified to educate your children, and they feed them in that price too! If the child is there full time they teach them to talk, walk and potty train them, botbto mention writing and preparing them for school.

I earn more than that just because I'm good with a spreadsheet. That doesn't seem fair when nursery staff are responsible for our kids health and wellbeing.

@insancerre

Childcare should be a joint cost that both parents contribute to There is tax free childcare which will reduce your bill by 20% and 30 hours at three, so it’s only an issue for 2 ish years, presuming you have one child

Unfortunately it’s not a straight 20% reduction. It’s a reduction up to a maximum of £500 over 3 calendar months. So if you’re paying £2k a month, the reduction is £166.67 per month. Which is nice, but nowhere near 20%. If your bills are routinely lower you might never clock this threshold.

OP I have 2 in outer London, and with 1 at childminder and 1 in a not for profit nursery with the 30 hours ‘free’ - which basically means another reduction in price - for 4 days a week (I work full time hours in 4 days) plus the ‘tax free scheme’ our bill is still around 2k a month so I feel your pain. It’s incredibly difficult to get a childminder in some parts of London and where we lived previously (zone 2) the CHEAPEST nursery was over £100 a day....

Other countries seem to be far more supportive of young families - it seems strange to me that we just should accept that if you have a child that will involve working for free for a few years to maintain your job!

I’m South West London, a fairly nice area (which pushes the costs up I suppose).

Extension of the 30 free hours to from 9 months for example would be a positive change - the gap of real help between ages 9 months - 3 years seems to be an enormous oversight (and the £2k is a drop in the ocean at the prices I mention!).

It really does suck, our costs are so expensive. The only thing I would say (and I’m sure you would be considering this) childcare is not an area to look to shop around for the cheapest option. There is a difference in the quality and whilst not always the case you typically get what you pay for. Have to cut down on other areas etc

But I agree the costs are crazy.

I do sympathise, however I saw that someone said a childminder costs about £8. Per hour. National minimum wage is £8-21 per hour so to get a childminder for less than this is pretty amazing. Childminders may be prepared to offer a small discount for siblings it is not a requirement but could be worth asking.
If you have more than one child then maybe consider a nanny as this could work out cheaper and you have the added advantage that they will probably feed the children, take them out, and may even push a Hoover round for you.

I agree OP. Where I am in a rural part of SE England there are only 2 childminders locally and they both charge £7.50 per hour plus more on top for their holidays. Over the years many of the childminders in our area have given up work. Nursery fees are even higher.

Even at £8 per hour though, that could be £80 a day.

I’d expect a childminder to be caring for a few kids, so hopefully getting more than minimum wage.

The providers should get a good wage (it’s an important job! But it also needs to be affordable for parents (hence why government intervention is probably the solution).

Currently looking at nurseries in London too and it will be like a second mortgage.