Rising cost of childcare drives one in three Brits out of their career

Almost one in four (23%) parents in the UK can no longer afford their current childcare arrangements, according to a new study by smart money platform Credit Karma.

In the wake of the Spring Budget, which promised 30 hours per week of free childcare for under-fives by 2025, The Great British Credit Report has revealed many parents are being priced out of the workforce. According to the study, nearly one in three (32%) mums and dads say the rising cost of childcare has made it unaffordable for them to continue with their career.

The issue affects men and women almost equally1 but disproportionately affects single parents, where the number of those impacted rises to 41%.

Nearly one in three (30%) have already had to make adjustments to childcare provisions due to the impact of the cost-of-living crisis.

Increasingly, parents in the UK are turning to credit and loan products to cover rising costs. Childcare is the expense most likely to be covered fully or partially by credit (15%) when compared to charges for holidays (11%), dentistry expenses (9%), or pet care (8%).

Mums and dads have higher debt levels overall – £1,609 compared to the national average of £1,327. They also have a lower-than-average credit score. What’s more, Britain’s single parents are taking on 24% more debt than the average UK adult – an average of £1,651 – in order to afford insurmountable childcare costs. 2

Single and separated parents are also most likely to have fallen behind on credit repayments with almost one in five (20% and 19% respectively) struggling to keep up with their monthly payments, more than triple the national average.3

The childcare crisis disproportionately affects Londoners, where cost of living concerns are at a record high, with more than three quarters (77%) citing living costs as the most important issue facing the capital.4 The proportion of parents struggling to afford childcare rises to almost two in five (38%) in the capital. The number of those forced to abandon their careers rises sharply here too, with almost half of working parents (48%) deeming their current working pattern unaffordable due to childcare costs.

Akansha Nath, Head of Partnerships at Credit Karma UK commented: “The rising cost of childcare is a problem facing many parents right now. As the cost of living continues to rise, it’s more important than ever for parents to budget their money and stay on top of their bill repayments as falling behind can lead to higher debt and more interest paid.

“Credit can be a great tool to cover the cost of rising expenses, if used responsibly. It’s critical that you only use as much as you’re able to reasonably pay back. There is also a wide range of options for those struggling to afford their current childcare arrangements, including leveraging the government’s tax-free childcare scheme, council community nurseries, and nanny share programmes.”