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Thursday, July 3

How to cut your childcare bill as nursery fees top £1,000

Blake FosterBy London 6 Mins Read



Data from UK Debt Expert reveals families are now spending more than ever on childcare – with London parents paying as much as £1,431.96 a month. For lower-income households, a single day of childcare can cost over seven hours of work, meaning many are essentially paying to work.

Even in less expensive areas like the North East, parents are still looking at around £945.50 per month for childcare.

The financial reality is pushing many parents, particularly mothers, to their limits – and for single parents, the situation is even more extreme. When other living expenses are factored in, the financial picture becomes even more daunting.

For a family of four:

  • In London, estimated monthly expenditure (excluding rent) is £3,213.
  • In Manchester, these costs amount to £2,517.60.
  • Even in a more affordable city like Leicester, families are looking at £2,228.50 per month.

Add to this the average monthly mortgage repayments, which range from £1,565 in Manchester to £2,227 in Bristol for a semi-detached house, and it’s clear why many couples are delaying or deciding against having children.

While both parents feel the financial strain, it’s women who often bear the brunt of the career impact. Women are more likely to take extended time off work or reduce their hours to care for children, leading to what’s often referred to as the “motherhood penalty” in their career progression and earning potential. 

In fact, research from the Institute for Fiscal Studies shows that by the time a woman’s first child turns 12, her hourly wage is typically 33% lower than that of a man.

Maxine McCreadie, a personal finance expert at UK Debt Expert, says: “The data paints an even more worrying picture for single parents, who are often facing the brunt of the financial burden.

“Unlike co-parents, single parents don’t have the luxury of splitting costs, meaning they are often forced to take on the full financial load for housing, childcare, and everyday living expenses. With 9 out of 10 single parents being women, it’s no wonder more women are deciding not to have children, and it’s essential that more support is provided, particularly as these families are more vulnerable to falling into debt.”

Further data from UK Debt Expert highlighted that for parents earning £16,000 per year, a single day of childcare requires over seven hours of work, compared to just 3.3 hours for someone earning the national average of £2,397 a month. 

This stark disparity highlights the heavier burden on lower-income parents, who must juggle childcare expenses with other essential costs, often leaving little time or money for social activities.

Maxine explains: “The high cost of childcare not only limits a parent’s financial flexibility but also their ability to maintain a social life. For lower-income families, the pressure to prioritise work and childcare leaves little room for social engagement, which can lead to feelings of isolation, especially for single parents or those in lower-paid jobs.”

Five ways to save money on childcare bills

  1. Start saving early: If possible, begin setting aside money for childcare costs before your child is born.
  2. Research all available benefits: Ensure you’re claiming all the government support you’re entitled to, such as child benefit and tax-free childcare.
  3. Consider flexible working options: Discuss flexible hours or remote work possibilities with your employer to potentially reduce childcare costs.
  4. Look into childcare alternatives: Explore options like childminding or nanny-sharing, which can be more cost-effective than traditional nurseries.
  5. Create a budget for baby essentials: Plan and prioritise spending on necessary items, and consider buying second-hand or borrowing from friends and family to cut costs.

Education Secretary urges Brits to consider having more children and have them sooner

This comes as Bridget Phillipson has called on Brits to consider having more children and have them sooner, warning of the “worrying repercussions” posed by a decline in birth rates.

The Education Secretary told the Daily Telegraph falling birth rates were not only a concerning trend but one which “tells a story, heartbreakingly, about the dashed dreams of many families”.

Official data from the Office for National Statistics shows fertility rates in England and Wales dropped to 1.44 children per woman in 2023, the lowest level since records began in 1938.

Ms Phillipson said people were scared off having children due to the high costs, and wanted “more young people to have children, if they so choose”.

“A generation of young people have been thinking twice about starting a family, worried not only about rising mortgage and rent repayments, wary not only of the price of fuel and food but also put off by a childcare system simultaneously lacking in places and ruinously expensive,” she said.

Ms Phillipson’s comments come months after she told the Daily Mail young women had been given added “freedom” to have more children by expanded government-funded childcare.

Since May, working parents of children who turn nine months old before September 1 have been able to apply to access up to 30 hours of free childcare per week, until their child is old enough to start school.

“They will be able to make choices about the career that’s right for them, the hours that they want, but also [have] the freedom to think about family size and how many children they want to have, with support from the Government around childcare hours,” she said in May.

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The expansion of funded childcare began being rolled out in England in April last year for working parents of two-year-olds.

Working parents of children older than nine months are currently able to access 15 hours of funded childcare a week, before the full rollout of 30 hours a week to all eligible families in September.

The Labour Government announced that up to 4,000 childcare places are set to be rolled out at new or expanded school-based nurseries in England from September.





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