Monthly childcare costs more than a mortgage as reported last week
By Kate Saines in Household Bills, Mortgages & Home June 10, 2019
Working parents with pre-school age children are paying more for childcare than for their home, a report by Royal London has revealed.Analysis of nursery fees showed care for a child under the age of two in England costs £1,065 per month in this setting, which compares to the average monthly mortgage repayment for new parents of £658 and the typical rent of £833.Even for parents with slightly older children, the costs soar above the price of owning or renting a home. Indeed, the average nursery fees paid for a two or three-year old child is £1,040 per month according to Royal London.
These statistics emerged as the result of a Freedom of Information request by the insurer which focused in on families where both parents were working full time and were not receiving free help from grandparents or other family members.It coincides with the launch of Royal London’s family financial planning guide which aims to provide couples who are thinking of having children with an in-depth look at the cost and income challenges they are likely to face.It warned that even after parents have received help from the tax-free childcare scheme, which offers 20% towards costs of caring for children, full-time nursery fees soar above average mortgage repayments and are roughly equal to the cost of rent.
What’s more, following analysis of Office for National Statistic (ONS) figures, Royal London estimated without free help from relatives around 1.2 million parents will face having to pay full-time childcare costs at any one time.Nearly two million parents could potentially pay part-time childcare costs.
Young parents earning the average joint disposable income for a couple aged between 29 and 34 of £34,000 and paying for childcare are likely to be left with less than £1,000 a month to cover living costs such as energy, food, travel and clothing.Royal London has dubbed the period of time when couples have children below the age of 11 as the ‘concertina’ years because people in this situation face prolonged higher living costs and reduced income.The guide revealed how income for families at this time can reduce by between 20% and 30%.Becky O’Connor, personal finance specialist, at Royal London, said the financial pressure on people with young families was immense and could last a decade.
“Young couples reply on two full-time salaries to meet living costs before children come along,” she said. “Once children arrive, childcare costs have to be paid and one parent often goes down to part-time hours, reducing household income.
“As a result of this concertina effect of higher costs and reduced income, there is very little left at the end of a typical month for savings or emergency costs. Paying for childcare puts parents at a real risk of financial hardship.”
Karen at way2paye helps parents with payroll for nannies and has offered some details regarding help with childcare:
For many working parents, childcare costs can play a large role when planning a return to work, or considering their career options and working hours.
Now that childcare vouchers have closed to new entrants, we are reminding employers that help is at hand with Tax-Free Childcare, a government scheme to help working parents with the cost of childcare.
Eligible parents could get up to £2,000 per child, per year, to spend on qualifying childcare. For parents with 2 children, that could mean a saving of £4,000 on the family budget. Employees can speak to HR regarding this or go to .GOV for more information
To become Ofsted registered to claim child care vouchers your nanny needs to be:
1. Trained- 6 common core skills
3. Pediatric first aid
We are able to offer the training , can help register for the DBS, recommend payroll companies and insurance. Please call us if you need any further information regarding this or do look at website for further information
Further information on payroll and costs:
T: 01604 743346
F: 01604 743346