Cost of holiday childcare continues to rise

The cost of holiday childcare continues to rise hitting families’ financial resilience according to Coram’s annual Holiday Childcare Survey.

The data showed that childcare prices increased this year by 6% since last Summer. A place at a holiday club now costs 2.5 times more than an after-school club during term time (£175 per week compared to £69).

The data also found that 17% of local authorities say they have enough childcare places to meet the demand for childcare of parents working full time – a drop of 7 percentage points.

Susannah Streeter, Head of Money and Markets at Hargreaves Lansdown said “Children may be priceless, but they are increasingly tough on the bank balance, with the cost of holiday childcare ramping up again. It’s the last reminder families need when they are starting the holidays, which is already a super-expensive time of the year with kids clamouring for trips and clubs.

“The latest HL Savings and Resilience Barometer shows just how tough it is for single parent households, in particular. Single parents suffer particularly badly partly because they either cannot work or have to add childcare to the burden of costs they face alone. Some 72% have poor or very poor financial resilience – twice the average rate. On average, they have £50 left at the end of the month, and only around one in four have enough emergency savings* (26%). They’re also more likely to be behind on bills or debt repayments. Almost a third are in arrears (32%) compared to a national average of less than one in ten (9%).

“It’s little wonder many parents, particularly women, are choosing not to return to work, given their pay is often wiped out by the cost of childcare. For those unable to cling onto work, it’s often much harder to restart a career once children have become older. This can have drastic consequences for female financial resilience later in life. Women in their late 50s have just 62% of the pension wealth of men according to the Pensions Policy Institute. Improving the opportunities for flexible working and affordable childcare are a big part of solving the gender pay, pension and investment gap.

“There is some more help on the way, but it’s going to take time to be delivered. The Conservatives were already rolling out free childcare for children aged nine-months and over – which should be fully in place from September 2025. Questions remain about whether there will be enough places nationwide to deliver the policy. However, Labour has also committed to the expansion and has promised to deliver 100,000 childcare places in 3,300 nurseries in schools, paid for by VAT on private schools. The new government’s idea is that spare classrooms will be freed up, which may be doable given that there are falling numbers of primary school children. But although the space may be available, the staff might not be. The sector is struggling to attract and retain staff, amid low rates of pay and competition from other industries. There are already high numbers of vacancies and it’s estimated that at least 40,000 more nursery nurses and pre-school teachers will be needed to enable capacity to ramp up and meet demand.”