Article date: 29 December 2014
- Parents of 0-5s juggle earnings with childcare expenses
- 1 in 10 families using childcare for 0-5s say lower earner takes home nothing after childcare / work costs are paid
- Lower earner typically brings home just £243 after childcare / work costs are paid
- One in three families using childcare for 0-5s turn to grandparents
Working parents are being hamstrung by childcare costs, with thousands effectively working for nothing, Aviva can reveal.
The company’s bi-annual Family Finances Report reveals that one in 10 families paying childcare costs for youngsters aged 0-5, effectively see one earner bring home nothing from his or her job after childcare and work costs(1) are taken into account. Similarly one in four families in this position has one parent who brings home less than £100 a month after costs.
The company surveyed 2,000 families with children aged 0-5 and discovered that, for all who paid for childcare, the median amount left over from the lower earner's salary(2) is just £243 a month.
Four per cent of women surveyed also said they are ‘paying to work’, because their costs are greater than the income they bring in.
According to official figures there are 4.8 million children in the UK aged 0-5(3). Almost half of UK parents with children aged 0-5 said they use childcare to enable them to go out to work (43%). Five out of six (84%) of these parents say they pay for at least some of their childcare.
The most popular form of childcare for these parents is paid-for nurseries / out of school clubs used by 56% of those using childcare. However, the second most popular form of childcare is care provided by grandparents or family members, who help out one in three families (35%).
The findings echo warnings from charity Barnardo’s(4), which revealed recently that many parents on minimum wage face paying more for childcare than they would receive in wages and benefits if they work, under the new Universal Credit, making it even harder for them to lift themselves out of poverty.
The Family and Childcare Trust(5), which publishes studies of childcare costs , says the average cost of childcare in the UK is £11,700 for a family with one child in full-time nursery and one in an afterschool club. That’s 62% higher than the average UK mortgage – making it the most concerning household bill for many families.
The research shows that parents choose to work while their children are young for many reasons: for mental stimulation, child development and fear of career stagnation if they take time off. A third (34%) believe that children will develop quicker or learn more in a childcare setting, while 30% say they enjoy the intellectual challenge and social interaction of work. A further 27% say that they feel that working outside the home makes them a better, more rounded parent. Meanwhile 13% say that they work in a competitive industry so don’t want to take too much time off work.
Louise Colley, protection director at Aviva, said: “Aviva’s findings paint a picture of a nation of parents struggling to keep their heads, and careers, above water in the face of rising childcare costs. There are many benefits to going to work including, in some cases better mental health for the parent and good developmental growth for children in good childcare settings.
“Parents clearly value all of these benefits, and yet it is frustrating for them to feel that, in some cases they are working for nothing once high childcare costs are taken into account. It is vital that the government and employers understand the circumstances and needs of these parents. It is also important that these finely-balanced family finances are protected by appropriate insurance so that living standards can be maintained in the face of sudden shocks such as illness or bereavement.”
View the Family Finances Report PDF (1.7MB)
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Notes to editors:
1. Costs relate to childcare, commuting, workwear and work-related equipment.
2. Includes single parent families and parents who are divorced, separated and widowed.
3. ONS mid population 2013 data counted 4,811,411 children aged 0-5 across the UK.
The Aviva Family Finances report is an in-depth study into the financial needs 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 child
- Single parent raising one or more child alone
Data was sourced from the Aviva Family Index which used findings from over 24,000 people who are members of one of the six groups of families identified above via ICM research. 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.
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