Holiday childcare costs rise by 4%

New data from Coram Family and Childcare’s annual Holiday Childcare Survey has found that childcare costs have gone up by 4% since last summer.

The data shows that working parents face an average bill of £179 per child per week – £1,075 for the six-week break.

Commenting on the data, Susannah Streeter, Head of Money and Markets at Hargreaves Lansdown, said ‘’Families face increasing financial pressure this summer, as costs of childcare over the holidays rise yet again. Working parents face an average bill of £179 per child per week – which can turn into a big bill of more than £1,000 for the six-week break. It creates a conundrum for parents who face a tricky financial choice. They could take a major chunk of their annual holiday allocation to cover the long gap between terms, but it may leave them short to cover other school breaks.

“Without longer-term planning the other options are accepting the financial hit of high childcare bills, pursuing unpaid parental leave or muddling through, trying to balance their career and children clamouring for attention.

“The HL Savings and Resilience Barometer shows that single parents are particularly behind in financial resilience, and one of the other reasons is due to high childcare costs. Single parents are in a particularly tight spot as they have to cover all their living costs with one wage as well as paying out more for essentials like food. When you also add children into the equation then you can see why many single parent finances are stretched to breaking point even before they start saving into pensions. On average, they have just £50 left at the end of the month, and that’s likely to dwindle further this summer with the cost of holiday childcare rising again. Rising day-to-day bills are why it is so difficult for this group to build up their financial resilience and save for the future, particularly later life. HL Research shows that only 18% of single parents are on track for a moderate retirement income.

“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.”