Surge in parents wracking up debt to fund childcare, study finds

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Increasing numbers of parents are racking up debt to fund childcare prices, in accordance to damning new analysis.

A study by Pregnant Then Screwed and Women In Data discovered 46 per cent of parents in England with a baby beneath the age of 5 say they accumulated debt or have been pressured to dip into their financial savings to pay for childcare – a 30 per cent surge from final yr.

Researchers additionally found that round one in 5 parents with a baby beneath 5 was pushed into taking cash out of their financial savings and pension to foot their childcare prices.

And round one in 4 say they have been pressured to resort to utilizing bank cards, taking out a mortgage or borrowing cash from family members or associates.

The state of affairs is way extra stark for single parents with a baby beneath 5, in accordance to the survey, with two-thirds racking up debt to fund childcare.

Joeli Brearley, chief government and founding father of Pregnant Then Screwed, stated: “We have not only got a cost of living crisis, we have got a cost of working crisis that disproportionately impacts mothers.’’

Her comments come after chancellor Jeremy Hunt revealed a major extension to free childcare for parents in the spring of last year to win back voters, with working parents who have children under five told they can claim 30 hours of free childcare for 38 weeks per year from September 2025.

However, The Independent recently revealed that thousands of nurseries have shut their doors amid staffing shortages, sparking fears the government’s promise to expand free childcare was “doomed to failure”.

The implementation of the federal government’s new free childcare provision has been tough, with many parents nonetheless ready to discover out if they’ll get a funded spot, Ms Brearley warned.

She stated many others are “complaining that cost savings are minimal due to significant price increases for childcare costs outside of the funded hours”, including: “It is clear that after years of disappointment, parents are struggling to believe the promise that things will get better.’’

Researchers polled 35,800 parents, using a nationally representative sample of 5,870 parents for the new report.

“Being a parent is tough enough, but when having more children means sacrificing your income, procreation feels like financial suicide,” Ms Brearley stated. “If we aren’t careful, becoming a parent will be a luxury item, and the economy can’t afford to pay that price.”

The analysis discovered round half of parents with a baby beneath the age of 5 in England report being pressured to fork out greater than 1 / 4 of their family earnings on childcare – a surge of 16 per cent since final yr.

Meanwhile, a 3rd of parents warned that their childcare supplier has a ready listing longer than 9 months, whereas a meagre 13 per cent of parents say there aren’t any issues with discovering childcare spots shut to them.

The Independent lately revealed warnings from specialists that Mr Hunt’s Budget childcare pledge was quick unravelling amid “chaos” over funding preparations. Some warned that the sector has not been given sufficient money or assist to ship the promise by April.

The Organisation for Economic Co-Operation and Development (OECD) discovered the UK had probably the most costly childcare programs in the world.

A spokesperson for the Department for Education stated: “Our average, funding rates for new entitlements are expected to be substantially higher than the hourly fees paid by parents last year, and we are already seeing providers looking to expand their placements across the country.

“We published funding rates in November, and are urging local authorities to confirm their rates by the end of the month.”