Paying the price: the childcare challenge

Published on 11 March 2015


Our look at the challenges facing single parents to find and sustain childcare, and the extent to which the increase in support for childcare costs under universal credit will help low income families.

We found the lack of affordable childcare is still a strong barrier to work and study. Recently, increased fees and new ‘hidden’ costs (eg paying for meals and activities) are also taking its toll. Many single parents are now facing debt and childcare arrears from trying to manage high childcare costs.

While more help under universal credit is definitely welcome, many single parents will not see the benefit for a long time – universal credit won’t be fully rolled out until at least 2022. Our analysis also shows that many will still not see much progress even with the extra support – those with high childcare costs, particularly if they’re on a low wage, will still be far off a decent income and will lose out if they work more hours.

Key findings

  • Around half (47 per cent) of single parents surveyed had to borrow money from friends, family or banks to pay for childcare in the previous two years
  • Remaining on support for 70 per cent of childcare costs (under tax credits) rather than 85 per cent of costs (under universal credit) means a low-paid single parent with two young children would lose £3 a week by moving from part-time to full-time work, instead of gaining £20 a week
  • Gingerbread is calling for consistency for parents, increasing support in tax credits as well as universal credit
  • We want to see the cap on childcare costs eligible for support increased in line with inflation – it has not changed since 2003
  • We would like more flexibility from the government when delivering childcare support through universal credit, particularly to help with fluctuating and up-front costs.