‘Childcare fees plunged us into debt

Parents are living in fear of nurseries hiking fees as a result of minimum wage and National Insurance increases.

Families have revealed the knock-on effects of the measures taken in the Budget, with new figures revealing a quarter of parents say they will need to leave the workforce if childcare costs rise by 10 per cent.

Research by campaign group Pregnant Then Screwed has found that just small increases in childcare costs could have a catastrophic impact on employment rates and could further compound the declining birth rate issue.

According to the Early Years Alliance, 95 per cent of childcare providers are set to increase their fees due to National Insurance and minimum wage increases.

Pregnant Then Screwed surveyed 3,847 parents who currently have a child in nursery in the UK and found that nine in 10 parents feel stressed about potential childcare increases.

A staggering 92 per cent of parents believe childcare providers should be exempt from the National Insurance increases, in the same way that schools are.

While a quarter (24 per cent) of parents said they will have to leave the workforce if costs increase by 10 per cent, additionally, 59 per cent of parents said that a rise in nursery fees would lead to at least one parent in their household reducing the number of hours they work or leaving work altogether.

Of those parents who said they wanted another child, almost a third (30 per cent) said a 10 per cent increase in childcare costs would make having another child unfeasible. This increased to 41 per cent of parents if childcare costs increased by 15 per cent.

Gurpreet Virdee, 33, told i her family’s nursery fees have gone up twice already this year and that has put them in debt.

Ms Virdee, who is married to Sandeep and has a son Kartar, three, and a daughter Jeevat, who is almost one, said it has been a difficult time financially for the family as her husband was made redundant a year ago and has struggled to find another job.

Ms Virdee, who works in human resources, told i: “Our nursery fees have increased by £120 a month this year and Katar only goes to nursery three days a week. There was a rise in January and another one in August.

“It is getting to the point where it just isn’t sustainable and it has put us into debt.”

Ms Virdee, who lives in Essex, is returning to work this week from maternity leave. She planned for her daughter Jeevat to start nursery. However, their financial situation means they have had to delay this until January,

She said if nursery fees go up again, they will have to delay Jeevat starting nursery until even later.

“With the National Insurance rise, I am predicting the nursery will hike the fees again and if this happens, we will have to delay her starting nursery for another few months,” she said.

“We wouldn’t take our son out of nursery at his age as it would be too disruptive. But because our daughter hasn’t started nursery yet, we have the option to delay that and are very fortunate to have both our parents nearby.”

Ms Virdee said her husband will be starting a new job in the New Year, which isn’t at the level he was working before, but she says they were “desperate and needed the money.”

“With my eldest, I did baby classes with him while I was on maternity leave right up until he was one. But we don’t have that luxury this time,” she said.

“The rollout of free childcare hours is amazing. But it doesn’t work or help if the Government then hikes National Insurance for nurseries which they then pass on to parents with increased fees. The rolling impact is a huge issue.”

Joeli Brearley, founder of Pregnant Then Screwed, said: “Labour repeatedly promised to prioritise the early years. They paid lip service to the critical function it plays in supporting a robust economy and improving the outcomes for children.

“We are seeing no evidence whatsoever that childcare and early years education is being prioritised now that Labour is in Government.

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“Working parents of young children cannot sustain any more cost increases. If the Government does not exempt providers from National Insurance increases, the impact could be catastrophic.”

A Government spokesperson said: “The Government has a clear mission to break the unfair link between background and opportunity, which starts with a reformed and sustainable early years system that gives every child the best start in life.

“We have taken tough decisions to fix the foundations, so that next year total spending on childcare will reach over £8bn – testament to the Education Secretary’s commitment to reforming early years as her number one priority.

“We take the concerns of the sector seriously and will continue to work with them and across government to ensure that funding arrangements give as much certainty and confidence as possible to deliver on the promises made to parents.”