According to new analysis by Save the Children, a parent with a three and four-year-old, who usually receives 30 hours of funded childcare, could face an increase of between £530 to £832 on their childcare costs during the summer holidays, depending on where they live.
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Save the Children says this is on top of other ‘spikes’ in costs throughout the year, leaving parents ‘constantly playing catch-up’.
It gives the difference in days in each month, as an example, which leaves some parents regularly having to pay more to cover increases in their monthly bills. Other parents report their childcare providers expecting them to pay for whole terms upfront.
Save the Children finds that for families on universal credit, the cost of childcare during the summer can mean they have to give up work altogether as they are made to pay for childcare costs upfront, before waiting up to a month to be reimbursed.
With many low-income families unable to save, the charity warns that frequent spikes in childcare costs will push many into the red, or block them from going back to work-the very opposite of what universal credit is designed to do.
Figures from Save the Children's analysis
Today, seven mums who have been pushed into childcare debt as a result of universal credit will join Save the Children to lobby Parliament, demanding that changes are made to the policy before it is rolled out nationwide.
They will call on the Government to pay childcare costs in advance – a solution which will cost no more than the current system and transform the lives of low-income parents and their children, says Save the Children.
Currently there are 30,000 parents in England receiving support with childcare through universal credit. This is set to rise to half a million families when the policy is fully rolled out.
One of the seven mums lobbying Parliament is Nichola, a single mum of one from Portslade, West Sussex, who was forced to borrow money from her family and resort to payday loans to cover childminder costs during the school holidays.
She works as a benefits adviser and recently moved jobs to increase her salary and working hours. She has since had to reduce her hours because she can’t afford the cost of childacre.
She said, ‘It’s enormous stress – you’re always on the back foot. Every six weeks there’s a half term. I’ve borrowed from my family to pay the last half term, and when I can’t come up with the extra money I’ve taken time off, but I’ve only got one week’s holiday left this year and there’s a six-week holiday coming up. How am I going to do this? This isn’t about the odd £50 – we’re potentially talking about having to find thousands.
‘If I don’t do something I’m going to go under. I took this job because it was more hours and I thought I’d be better off. But it’s just not do-able. The upfront costs have stopped me from working more hours.’
Save the Children’s director of UK Poverty Policy Martha Mackenzie said, ‘It's simply not right that families are being driven into poverty and debt by soaring childcare costs. Parents tell us it feels as if the system is stacked against them. They rely on childcare to go to work but when the school holidays come around, they find themselves faced with sky-high childcare bills they can’t afford. They are having to resort to desperate measures – cutting back on essentials, falling behind on bills or getting into debt – just to go to work.
‘The Government must change the system so that parents can get help with their childcare costs before they need to pay fees. This would make a massive difference to parents and children living in poverty -- and it wouldn’t cost more money.
‘Hundreds of thousands of families are set to start getting help with childcare through Universal Credit in the next few years. The Government must solve this problem now before the number of families falling into debt spirals out of control.’
A DWP spokesperson said, 'Help with upfront childcare costs is already available, either through our non-repayable Flexible Support Fund or as a budgeting advance.
'We’re committed to helping parents into work and those on Universal Credit can claim up to 85 per cent of their childcare costs, worth up to £13,000 a year for families with two children.'