Childcare costs force poorest families into debt

A third of parents turn down jobs because they cannot afford childcare, according to a study Britain’s poorest families are getting into debt because of the high cost of childcare, while a third are turning down jobs and 40% are considering leaving work because they cannot afford to pay for someone to look after their children, according to research. Parents spend almost a third of their incomes on childcare – more than anywhere else in the world, according to a study by Save the Children and the Daycare Trust . For four out of 10 families the cost of childcare is on a par with mortgage or rent payments, the study showed. Of those families in severe poverty, nearly half have cut back on food to afford childcare and 58% said they were, or would be, no better off working once childcare was paid for. The research found that parents, regardless of income, cannot afford not to work but struggle to pay for childcare, and despite many parents cutting back their spending almost a quarter are in debt because of childcare costs. Cuts to the working tax credit have hit families struggling in severe poverty, the charities said. Four in 10 of those affected have considered giving up work because they will no longer earn enough to cover the childcare bill. The cut has added an average of £500 a year on to the childcare bill of low income families, the research found. A quarter of parents in severe poverty have given up work and a third have turned down a job mainly because of high childcare costs. Of those parents in severe poverty and in paid employment 80% agreed with the statement: “Once I have paid for childcare, I am in a similar position to as if I was not working.” A quarter of parents in severe poverty have been unable to take up education or training because of high childcare costs and six out of 10 parents, regardless of income, said they can’t afford not to work but struggle to pay for childcare. The research supports recent analysis of ONS labour force figures by Aviva, which showed that the number of women opting to look after their children instead of taking up paid employment had risen by 32,000 since summer 2010, with rising childcare costs being a key factor in their decision. Sally Copley, head of poverty at Save the Children, said: “The government is undermining its own ‘make work pay’ policy by not funding the costs of childcare for the poorest families. “Childcare in the UK is among the most expensive in the world, and families on low incomes simply don’t earn enough to cover the costs and are being priced out of work as a result.” Copley added: “The government must give the poorest parents a chance to work their way above the poverty line. We know that the best way out of child poverty is to help parents into work.” The charities have called on the government to increase the amount they plan to spend on childcare support under the new universal credit in a bid to prevent low income families from being priced out of work and into poverty. Malcolm Tyndall, director at Elizabeth Finn Care, said: “Household finances in Britain are today being squeezed harder than at the height of the recession in 2009, and it seems perverse that parents are forced to turn down offers of work, or consider leaving employment, because they cannot afford the costs of childcare. “Women in particular are being disproportionately affected by ever-increasing childcare costs which, when combined with rising petrol prices, soaring rail fares and the reduction in the childcare element of the working tax credit mean that for many people work simply does not pay. We also know that when public sector job cuts begin to bite, even more women will be forced out of the workplace and their position within the economy is becoming increasingly threatened. “While everyone accepts that tough choices need to be made in order to tackle the deficit, it is worrying that the austerity measures seem to be disproportionately affecting woman and threaten to undo decades of social progress. Woman should not be used as shock absorbers for the cuts, and changes to the benefits system should not force people who want to work to choose between their careers and staying at home.” The charity offers a free and confidential service providing advice on benefits and financial grants. A spokesman for the Department for Work and Pensions said: “The cost of childcare is one of the most important factors for parents when considering work, and ministers have always said that under universal credit they will invest at least the same amount of money into childcare as in the current system. “We are working closely with the Treasury and other interested groups to ensure we get this right.” Childcare Family finances Household bills Work & careers Borrowing & debt Consumer affairs Family Children Poverty Social exclusion guardian.co.uk

Posted by on September 7, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.