Childcare costs 'pushing families into poverty'

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More than 130,000 children are living in poverty because their working parents struggle with paying for childcare, new research claims.

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Charities are calling for more support for families with childcare costs

Rising childcare costs are pushing families into poverty, a new report commissioned by Gingerbread and the Child Poverty Action Group has found.

The analysis by the Centre for Research in Social Policy at Loughborough University looks at child poverty after housing and childcare costs are taken into account.

The researchers also found that the risk of falling into poverty increased by a third for families that pay for childcare.

The charities argue that delays to the introduction of universal credit mean that low-income families will not be able to access the promised support from the Government of 85 per cent of childcare costs for several years.

They are calling on the Chancellor to urgently bring in support for 85 per cent of childcare costs under tax credits.

While the Government has committed to increasing support for low-income families from 70 to 85 per cent under universal credit from 2016,

The report points out that most parents on low incomes (i.e. those already on tax credits) will be pushed onto universal credit last. They cite the latest estimate from the Department for Work and Pensions is for these claimants to have moved onto universal credit by 2020.

Moreover, they say the roll-out of universal credit for new claimants is on hold for at least a year for families.

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.’

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.’

A Government spokesperson said, ‘We are absolutely on the side of hard-working families who want to get on in life. Thanks to Government reforms, the number of children growing up in workless families is at a record low.'

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