Children pushed into poverty by childcare costs


130,000 UK children are being pushed into poverty as working parents struggle to pay rising childcare costs, finds new research published by Gingerbread and the Child Poverty Action Group (CPAG) today.

The research, carried out by Loughborough University, also found the risk of poverty increased by a third for children whose parents pay for childcare.

Charities' warning

Gingerbread and CPAG warn that families struggling to make work pay have a long wait ahead for extra childcare support pledged by government, while costs continue to rise sharply above wages. In the last five years, nursery fees for under-twos have risen by 33 per cent. One in five children with at least one working parent is growing up in poverty.

The Government has set out plans to pay up to 85 per cent of childcare costs for low-income families on universal credit from next spring, an increase from the current 70 per cent available through tax credits. But with Universal Credit's rollout to families frozen for a year and full rollout delayed until 2019, this extra support is years away for many families.

Call to action

Gingerbread and CPAG are today calling on the Chancellor to ensure that Universal Credit delays don’t stop poor working families from accessing the 85 per cent of childcare support the Government pledged. The charities argue that by introducing the extra support through tax credits, hundreds of thousands of families will be able to start making work pay.

Gingerbread's Chief Executive's statement

Gingerbread Chief Executive Fiona Weir said:

“Any family knows that childcare is incredibly expensive, but this research proves that the costs are having a very real and damaging effect on the poorest families.

“Government proposals will go a long way to helping families with childcare costs – but support is years away from helping many poor families who simply can’t afford to wait.”

Child Poverty Action Group's Chief Executive's comments

Chief Executive of Child Poverty Action Group, Alison Garnham said:

“Despite recent progress, childcare costs still make it hard for low income working families to enter or progress in paid work. And children in these families still face the day to day reality of living in poverty because of it.

“The extra support with childcare costs is needed now so families don’t have to lose out because universal credit is delayed. The Chancellor must act now to make work a route out of poverty and deliver on his government’s pledges.”

It is also unclear when 30 hours of free childcare a week for three and four year olds will be available and the government has indicated that there is much work to be done before it will be available to families.

Source: Gingerbread press release: Childcare costs push 130,000 children into poverty

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Date of publication: 19 June 2015