2 in 5 mothers say high costs are still keeping them out of the workplace

2 in 5 mothers say high costs are still keeping them out of the workplace

14 Apr    Finance News, News

Two in five mothers feel prohibited from returning to work due to the high cost of childcare, even with Jeremy Hunt’s expanded childcare offering, a new survey of mothers has revealed.

“Nursery and childminder costs can swallow a huge chunk of new parents’ earnings, and with the current cost of living crisis squeezing every household’s budget, it’s no surprise that some women are put off going back to work,” said Novo Constare, chief executive of Indeed Flex who issued the report.

One third of working mothers surveyed reported spending over 30 per cent of their wages on childcare, Constare said.

This is not all too surprising: a report by the OECD found that professional childcare in the UK is one of the most expensive systems in the developed world.

In the UK, a couple earning two-thirds of the average income, with two children aged two and three, can spend 25 per cent of their salary on childcare versus nine per cent in France and one per cent in Germany.

The report compounds the need for greater support for working parents that was emphasised by Chancellor Jeremy Hunt last month.

Hunt’s Spring Budget expanded the number of hours of free childcare offered to parents. Currently, parents who work 16 plus hours a week and earn less than £100,000 are entitled to 30 hours free childcare per week for children aged three to four.

From September 2025, working parents of children under the age of five will be entitled to 30 hours free childcare per week in what the government described as “a transformational change that will make a difference to families across the country”.

Around two in five mothers surveyed by Indeed Flex seemed to agree – saying that the government’s help would be enough to get them back into work.

Equally, however, a similar proportion of mothers believed that despite all the additional support, childcare was still “too expensive”.

Constare said: “It is encouraging that the government recognises the childcare dilemma facing working parents. Nevertheless, many women still feel the measures announced in the Budget don’t go far enough.”

Britain is still desperately seeking employees: the government reports that 75 per cent of firms have struggled to recruit over the last year – with 1m vacancies yet to be filled nationwide.

With 1.7m adults staying out of paid work so as to look after family workers in the last quarter of 2022, the government is hoping to have found a ready-made supply to plug the gap.

Analysis by the Office for Budget Responsibility (OBR) found that the measures will succeed in adding 110,000 workers to the economy – an increase of 0.3 per cent in the size of the labour force.

The roles taken by these workers will tend to be more likely than average to be part-time, however – so earnings will be lower. However, the net contribution could be an increase of 0.2 per cent in GDP, the OBR predicts.

There are wider benefits too, with many nurseries forced to close after having offered free childcare, which was not fully compensated by the government, during the pandemic.

Overall, the Treasury-funded body says that overall the new childcare benefits will have a greater impact on GDP going forward than any other fiscal policy measure since 2010.

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