The ‘£50K Parent Penalty’ Is Real And Forcing 1 In 5 Parents Out Of Work

Every parent knows it’s expensive business raising children in the current economy – but just how much is it costing families? It turns out, quite a lot.

A Pregnant Then Screwed survey has uncovered what’s been dubbed “the £50k parent penalty”, where one in five parents in households earning less than £50,000 a year are being forced to leave their jobs due to the cost of childcare.

Not only are parents being driven out of work, but they’re also struggling to meet their own basic needs in the cost of living crisis.

Almost a quarter of parents (22.3%) have had to cut back on essential items such as food, heating or clothing to make ends meet.

This rises to 47.6% for single parents and 35% for parents of deaf, disabled, neurodivergent children or children with a serious illness.

Meanwhile over one in four (26.1%) have had to use credit cards, borrow money or get into debt to afford increasing childcare costs. 

Joeli Brearley, founder and CEO of Pregnant Then Screwed, said the £50k parent penalty “further entrenches poverty and inequality”.

“Our crumbling childcare sector continues to push new families into debt and onto benefits – work does not pay when you have a young child,” she said.

“We currently have the lowest birth rate in the last 20 years in Britain, and yet we are making it harder and harder for families to afford to have children.

“The cost of having a child today is one that many families cannot bear.”

What else did the survey find?

The charity polled 11,811 parents with children under five years old. Almost two-thirds (61%) said they or their partner had reduced the number of hours they work due to childcare costs or availability. This increased to 67% for Asian parents and 75% for parents of disabled children.

Families who have a household income of under £50k are being hit the hardest – with over three-quarters (76.6%) reducing their hours to make childcare work. 

Almost half of parents (48%) cannot access the childcare they need, with 77% of those stating that this is due to cost – and 47% said they can’t find suitable or available childcare. 

The UK has one of the most expensive childcare systems in the world – and costs are continuing to rise.

According to charity Coram, the average annual cost of a full-time nursery place for a child under two in Britain is just shy of £15,000.

The TUC previously warned that the cost of early years care for a child under two could rise to £2,000 a month by 2026. But for some, this is already the case. One dad in London previously told HuffPost UK he’s shelling out £2,100 per month for his daughter to go to nursery four days a week.

Pregnant Then Screwed found 41% of parents have had an increase of between 5-10% in their childcare fees in the last 10 months; while a further 14% say their fees have risen by more than 10%.

The survey also found 42% of parents said the cost and availability of childcare has prevented them from having any more children.

There’s no denying the childcare sector is in crisis – soaring nursery fees, staff retention issues and nursery closures are just some of the issues it’s facing, with repercussions for childcare workers, parents and children.

At the start of the year, chancellor of the exchequer Jeremy Hunt revealed his grand plans to tackle the UK’s childcare crisis – expanding the ‘free hours’ scheme, relaxing childcare staff ratios and allowing working parents on benefits to get childcare support payments upfront.

But those working in the sector are worried that things may just get worse as a result – especially if the sector remains underfunded. 

Brearley continued: “Childcare isn’t just a place for kids to go while their parents work; it is the earliest education for our children and plays a huge role in supporting children’s emotional and physical development.

“The early years practitioners who are working tirelessly for poverty wages deserve better – the government’s plan to increase the ‘free hours’ scheme for younger children will only make the availability and staffing crisis worse. There is little point in affordable childcare, if parents are unable to access it.”

She added that the sector needs immediate investment and an ambitious workforce strategy.

Neil Leitch, CEO of the Early Years Alliance, said “years of underfunding” have meant providers have needed to increase their fees, which has made it “increasingly difficult” for families on lower incomes to access affordable places. 

“With the upcoming expansion of the 30-hour offer set to disproportionally benefit higher-income families, the inequalities that we are already seeing will only worsen going forward,” he said.

“Worse still, if the offer isn’t funded correctly, we are likely to see providers forced to increases prices for those families not eligible for the funded offers, or risk going out of business entirely.”

A Department for Education spokesperson told HuffPost UK: “Our roll out of the single biggest investment in childcare in England ever will mean that the UK has the one of the most generous childcare entitlement offers for working parents, by international standards.

“We will be expanding 30 free hours of childcare for working parents down to nine months old over the next two years, which will save eligible working parents up to an average of £6,500 per year.

“By 2027-28 we expect to be spending £8 billion in total every year to support parents with flexible and affordable childcare and give children the best quality early years education.”