Struggling families should be given more help to cover childcare costs which are soaring as a result of cuts to working tax credit, charities urged today.
Save the Children and the Daycare Trust have launched a consultation to find out how the government’s recent restricting of working tax credits from 80 to 70 per cent of childcare costs is affecting poor families.
They hope the move will persuade the government to reverse its decision, which has left many low income families with a massive extra £546 a year added to their childcare bill.
As a result families are being forced to cut back on household essentials, the charities said.
The consultation aims to map the extent of the problem and lend evidence to the ongoing campaign against crippling childcare costs.
“The increase in the number of hours needed to claim working tax credit will particularly hurt parents in part-time employment who cannot find extra work,” said Michael Connellan, spokesman for the Family and Parenting Institute.
“Many British couples dip into poverty once they have children. They face a postcode lottery in terms of childcare options and affordability.”
CEO of single parents’ charity Gingerbread Fiona Weir said: “The cut to childcare support will hammer hard-working single parents. A single parent working full-time with two children could lose up to £2,000 a year.
“The government is sending out really mixed messages – at the same time as introducing a Welfare Reform Bill intended to make work pay, it is actually making it harder for single parents to do so by cutting help with childcare costs.”
Research from the Organisation for Economic Co-operation and Development has put Britain among the countries with the most expensive childcare costs in the world, accounting for 28 per cent of the average net income for a two-earner household.
Save the Children head of policy Sally Copley said: “Childcare is so expensive it’s becoming a luxury that only families earning a very good wage can comfortably afford.
“For families on low incomes they simply won’t earn enough to cover their childcare bill as well as living costs.”
The Daycare Trust’s own research shows childcare costs have risen every year for the last decade and the average weekly cost to put a child under two in full-time nursery care is £177.
It argues the figure is prohibitively high for families living in severe poverty with an annual income of below £12,000 – under £230 a week.