Parents give up work as childcare costs outstrip income

Article date: 31 August 2011

  • Financially unprotected families left vulnerable as they rely on one salary
  • 32,000 more women choose to stay at home to take care of their families
  • School inflation hits 6.89% as parents pay £111 per month on school extras

Parents are questioning whether they can both afford to work, due to the high cost of childcare. According to new research from Aviva, a working mother could be up to £98 a month worse off after all child and work costs are taken into account*.

As a result, thousands of families could be left in the potentially vulnerable position of relying on a single salary. More worrying still, the Aviva study shows 95% of UK families don’t feel completely financially protected against the loss of an income.

The findings are highlighted in Aviva’s latest Family Finances Report which is released today. This edition shines a spotlight on the challenges faced by working parents, and the fact that the majority of these families are worryingly under-protected financially.

Significant childcare costs:

An in-depth analysis of childcare costs reveals the financial struggles that many working parents face, with typical full-time care costing £385 per month per child. Parents who need full-time care for children under two have to pay the most (£729 per month) while those with older children who need part-time care pay the least (£78 per month) (see table below).

Cost per month per age group**:

Child age

Full-time care

Part-time care

School/nursery costs

All Children




Up to 2 years




2 to 11 years




11 to 18 years




While 54% of families claim they don’t use childcare and 31% say their family/friends provide this for free, those parents who do pay can find it incredibly difficult to juggle their finances. Even those who don’t pay for childcare find that they are spending an average of £111 per month on child-related expenses such as sports activities, food at school, clothing and transport - costs which have seen inflation of 6.89% over the last year***. 

Cost of employment:

In addition to childcare and schooling costs, the average working family member spends £120 per month (full-time) and £90 per month (part-time) on expenses associated with employment such as transport, food and clothing.   

Therefore - when all costs are taken into account - the average woman with two children (one year and seven years old) would be out of pocket by £98 per month if she worked part time, and better off by just £120 per month if she worked full time (see notes to editors). While Government benefits could provide some support, many families have seen cuts in this area and may need to consider whether this kind of support is sustainable going forward.

Single income families leave themselves exposed:

With some women finding their income eroded by the associated costs of working, it is unsurprising that 32,000 more women have chosen to stay at home to look after their families since Q3 2010. However, while this can make financial sense, it can leave families in a vulnerable position if the main breadwinner is unable to work for any reason.

Worryingly few families appear to be taking proactive steps to protect themselves: 60% are without life insurance, 85% are without critical illness cover and 90% are without income protection. Instead, should the average family lose one income, they would look to cut spending to a minimum (51%), turn to the Government for help (28%) or dip into their savings (25%). Although with average savings at just £982 or under half a month’s income, this is unlikely to last long.

If they were faced with a permanent loss of an income, families’ immediate worries would be about meeting their bills (71%), maintaining their standard of living (42%) and being forced to move home (37%) - all stressful issues to deal with at a time of great need.  

Children are also a major concern in this scenario, with 29% of parents worried about how this might impact on their behaviour and 23% concerned about their performance at school.

Louise Colley, head of protection for Aviva and mum to four-year-old twins comments: "This report shows very clearly the challenge many families with young children face as they balance their income with the cost of childcare. As care costs rise, it's quite possible we will see more and more couples relying on one salary while the other person looks after the children - simply because they may actually be worse off if both people work.
However, while this may make financial sense, it can also leave families vulnerable should anything happen to that income earner.

"Families today face an array of money worries, as this report shows. But the unintended consequences of not having protection in place can be huge - both financially and emotionally - should the unexpected happen. Sixty percent of families don't have even basic life insurance so we'd strongly urge all families to consider the 'what ifs' and take steps to make sure they're covered. After all, we go out to work to do the best for our families but if we don't have suitable protection, we could be leaving them financially exposed."


Download The Aviva Family Finances Report - Summer 2011 PDF (2MB)

If you are a journalist and would like further information on a specific family group or region, please contact:

Aviva Press Office:
Sarah Poulter
01904 452828 / 07800 691569 

The Wriglesworth Consultancy
Lee Blackwell / Ben Marquand
020 7427 1400

Notes to editors:

* = Example of the childcare equation:

Woman in a committed relationship with two children (1 year old and a 7 years old) and using childcare

Working Status

Annual income (monthly income)****

Work costs (monthly)

Child costs (monthly)

Income at end of month


£8,557 (£713)





£17,513 (£1,459)





Woman in a committed relationship with two children (1 year old and a 7 years old) who doesn’t use childcare

Working Status

Annual income (monthly income)****

Work costs (monthly)

Child costs (monthly)

Income at end of month


£8,557 (£713)





£17,513 (£1,459)




**** = post tax and national insurance

** = These figures were developed using data from the Day Care Trust combined with statistics from 1,200 families with children and taking into account age appropriate levels of care.   Regional statistics are available.

Data was sourced from the Aviva Family Index which used findings from over 6,000 people who are members of one of the six groups of families identified above via OpinionMatters. This report is a definitive look at the personal finances of families in the UK. Not only does it look at personal wealth, income sources and expenditure patterns but also tracks how these change across the different types of family unit.

In addition to the regular data, each quarter a spotlight will be shone onto a different relevant topic with costs associated with schooling being the choice for August 2011.  Additional data was sourced from Day Care Trust and Office of National Statistics.

The Aviva Family Finances Report investigates the finances of the 84% of the UK population who live as part of a modern family. Based on customer profiles and Government data Aviva has recognised the six most common types of modern family as:

  • Living in a committed relationship with no plans to have children
  • Living in a committed relationship with plans to have children
  • Living in a committed relationship with one child
  • Living in a committed relationship with two or more children
  • Divorced/separated/widowed with one or more children
  • Single parent raising one or more children alone

Changes to employment levels were sourced from Labour Force Survey from ONS

*** = The cost of school inflation was determined using appropriate weightings from 1,200 parents and the inflation rates relevant to the specific costs which make up school inflation. These include food, public transport, clothing, petrol, after-school activities and outings etc.  

About Aviva:

Aviva is the world’s sixth largest* insurance group. We provide more than 53 million customers with insurance, savings and investment products with total worldwide sales in 2010 of £47.1 billion**.

We are the UK’s largest insurer with 19 million customers and one in three households has a relationship with us. Our combination of life, health and general insurance is unique in its scale and breadth in the UK market. Customers can choose to buy our products through intermediaries, our corporate partners or from Aviva direct and we have become the partner of choice for many of the UK’s biggest organisations. 

We are ranked as one of the UK’s top 10 most valuable brands and Aviva plc are in the top 10% of socially responsible companies globally in the Dow Jones Sustainability World Index. In 2010 we invested £4.3m into our communities in the UK, which included 1,500 Aviva volunteers giving 24,000 hours for good causes. In addition, our employees gave £600,000 through fundraising and donating. Read our corporate responsibility report at

Aviva is working in partnership with Railway Children through the Aviva Street to School programme to get children living or working on UK streets back into everyday life. Find out more at

The Aviva media centre at includes company information and a news release archive.

For broadcast-standard video, please visit

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* based on gross worldwide premiums at 31 December 2010.
** at 31 December 2010.


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