Scots parents hit as childcare costs rise

The research, conducted in partnership with Save The Children, also revealed that one in three people in the UK’s poorest families had turned down a job, and 40 per cent are considering quitting work because they can’t afford for someone to look after their children.

Almost two-thirds of parents, regardless of their income level, said they couldn’t afford to work but struggled to pay for childcare.

Anand Shukla, chief executive of the Daycare Trust, said: “We hear from parents every day who are forced to make difficult decisions about their career and family life as a result of Britain’s high childcare costs.

“Being able to work and be financially independent is in the interests of both families and our wider society; yet as our survey shows, parents are being forced out of work as a direct result of how expensive childcare is now.”

In its annual childcare costs survey, published earlier this year, the Daycare Trust found that the cost of childcare in Scotland is the highest in the UK outside London, with 25 hours a week of care for children under two years old in Scotland costing an average of £5,178 a year.

A family in Scotland with one child under two needing 50 hours of childcare a week would be paying £10,400 on average a year, it found.

And those figures will have risen since the study was conducted, due to a combination of higher prices and government cuts.

A reduction from 80 to 70 per cent in April in the maximum proportion of childcare costs covered by working tax credits – averaging out at a loss of £545 for those affected – and the freezing of child benefit have come at a bad time for working families, who are spending 25 per cent more on care for a child under the age of two than they were five years ago, according to the Daycare Trust.

It could get worse too, not least if the government presses ahead with plans to withdraw child benefit from families in which at least one earner is in the higher-rate tax bracket from the start of 2013.

Withdrawing child benefit from middle-income families isn’t the only measure coming into force in 2013 that could make matters worse for some parents. From April of that year, lone parents of children as young as five will be moved from Income Support to Jobseeker’s Allowance, which means they will have to apply for jobs or potentially lose their benefits. If they get a job, they will then have to find childcare, opening up a whole new problem, according to Susan McPhee, head of social policy at Citizens Advice Scotland (CAS).

“Local authorities in England and Wales have a statutory obligation to provide affordable childcare, but there is no such duty in Scotland,” she said.

“As a result, the childcare that exists here is generally expensive and not always available. The Welfare Reform Bill makes no mention of this, which is a significant issue for Scottish parents. Some parents simply won’t be able to afford to go back to work.”

At the same time, the increase in household costs – including energy and fuel bills and higher VAT – continues to outstrip pay, with wages stagnant.

McPhee said: “The general economic situation is putting pressure on families everywhere. The cost of living is rising as incomes fall. People simply have less money, and that obviously affects how they can support their children.”

In evidence given to the Scottish Parliament last week on the implications of the Welfare Reform Bill, CAS warned that it failed to address the lack of high-quality, flexible and affordable childcare required to meet the demands made of benefit claimants in Scotland.

But Shukla at Daycare Trust said that, while costs are rising, there is help on hand for parents.

“Many employers provide help with childcare costs as part of their employee package, and many parents are entitled to some support through tax credits.

“Parents should also contact the children’s information service at their local council to find out about services in their area.”

One of the key steps you can take is to ensure you’re getting all the help to which you are entitled. For example, parents in Scotland with children aged three and four can claim 12.5 hours of free childcare a week, regardless of income.

Tax credits can also make a big difference, despite the recent cuts. Parents can claim up to 70 per cent of their childcare costs through the childcare element of the working tax credit, up to a maximum of £175 a week for one child and £300 for two. See the tax credit calculator at www.hmrc.gov.uk to check if you qualify.

Your employer may also be able to help out with your costs, such as through salary sacrifice. The first £55 a week of your pay can be sacrificed and diverted to a childcare voucher scheme, free of income tax and national insurance contributions. If your employer offers childcare vouchers, it’s worth exploring how you can make the best of them. But be careful of over-claiming payments if you already benefit from the childcare element of working tax credit.

A less well-known option if you pay for a nanny is to look into sharing one with another family near you, a measure that could work particularly well for part-time workers. But the drawback is that with few nannies actually registered, using one may compromise your eligibility for tax credits or childcare vouchers. There’s a free online service – at www.nannyshare.co.uk – where you can look for other families in your area who may be in a similar position.

* For more information, visit: www.payingforchildcare.org.uk