‘Our nursery fees are going up 12pc and now cost more than our mortgage’

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They say a mortgage is your biggest financial commitment. But for Lauren Hansell and thousands of other parents, housing costs are dwarfed by the monumental cost of childcare.

The 34-year-old and her husband pay £69 per day in nursery fees for their 16-month-old daughter, totalling more than £800 a month for three days a week. But care costs are rising across Britain as nurseries struggle to absorb inflated energy and food prices.

Last week Ms Hansell received an email informing her of an inflation-busting 12pc price rise at her daughter’s nursery from April, which will increase the daily cost to £77.

She said: “Our monthly childcare costs will then be almost £1,000 a month. We already spend more on nursery fees than we do our mortgage, by about a fifth.

“My salary goes entirely on housing and childcare costs, there is no way we could afford it without a double income.”

It comes as rumours grow that Jeremy Hunt may be preparing to unveil a package of reforms aimed at cutting the cost of childcare in a bid to help parents back into the workforce.

Around 1.5 million women are not in work because they are looking after their family or home, compared with 240,000 men, according to the Office for National Statistics. Of mothers not in work, 44pc said they would rather be employed but are unable to find affordable and reliable childcare.

Ms Hansell belongs to a generation of parents who now spend more on nursery fees than they pay for their mortgage or rent. A survey of 27,000 parents by campaign group Pregnant Then Screwed last year found almost two-thirds of families spent more on childcare than housing.

British households on a fixed-rate deal spend an average of £792 on monthly mortgage payments, according to UK Finance, the banking trade body.

Meanwhile, full-time nursery fees for a child under two in the UK cost an average of £1,106 a month – 40pc more than a household’s typical mortgage costs.

Funding for the childcare sector has failed to match rising energy and food prices, while providers have struggled to attract staff with competitive wages.

A third of nurseries, pre-schools and childminders are at risk of closure in the coming 12 months, according to the Early Years Alliance, and most plan to increase fees in a bid to cover inflated costs.

Providers are expected to increase fees by an average of 8pc this year, according to the alliance, which would increase the typical monthly childcare bill to £1,195. For many parents, such as Ms Hansell, the rise will be higher.

‘I 100pc support the nurseries – it is not glorified babysitting’, says Ms Hansell Credit: Lorne Campbell for the Telegraph

Ms Hansell said: “I 100pc support the nurseries and understand why they need to put their fees up. They do an absolutely fantastic job – it’s not glorified babysitting, it’s crucial early years education.

“The issue goes far deeper to a lack of investment in the sector. The Government needs to take it seriously and understand childcare isn’t a choice or luxury for parents, they need to work.”

Sky-high care costs account for more than half of the take home pay of an average £33,000 salary, according to an analysis of 800 day nurseries by Penfold, a pension provider.

Parents have been forced out of work or into debt in a bid to manage care bills, with disastrous repercussions for their income, pensions and mental health. It is most frequently mothers who suffer the consequences of crippling childcare costs, with women carrying out an average of 60pc more unpaid work than men, according to official figures.

Pete Hykin, of Penfold, warned the disparity between time spent by women and men doing unpaid care was the “biggest contributor to the gender pension gap”.

Mr Hykin said: “The increase in childcare costs is pushing parents, especially mothers, out of full-time roles, which stunts their career options, but also widens the savings gap as they’re less able to contribute to their pension pots.

“The maternal pay gap, which measures the wage difference between mothers and non-mothers, is growing as a result of rising nursery fees and lack of funding.”

The chronic shortage of affordable childcare means many women lose money if they choose to work and pay for care, ultimately pushing thousands out of the workforce.

Ms Hansell added: “I’ve been working full-time since I was 18 and worked really hard to get to this point in my career. We also need two incomes to meet our financial commitments, so giving up my job isn’t an option.”

London is the most expensive region in the UK to send a child to nursery at an average cost of £80 a day and £1,607 per month, based on 20 days of care, according to Penfold’s analysis. 

Berkshire and Hertfordshire are the second most expensive places for childcare, with daily rates of £78 a day and £1,569 a month. By contrast the cheapest childcare fees are in Ceredigion, West Wales, where the average nursery costs £34 a day and £687 per month. 

The Treasury did not respond to a request for comment.

Source: telegraph.co.uk