'My nursery fees have shot up to £950 a month. I feel sick'

Nursery costs in the UK are among the highest in Europe - and they’re rising fast.

As the cost of living puts pressure on family budgets, childcare is set to become an important battleground in the run up to the next general election.

So what are politicians promising, and can they help save money for working parents?

Hannah Fearn - who is facing her own high childcare costs - found out.

Why is everyone talking about childcare? Last week, I received the inevitable but unwelcome news that my daughter’s nursery fees had gone up, and I would now be paying almost £1,000 a month for three days of childcare a week for just one child. When I shared my anxiety about meeting the cost on X (previously Twitter), it struck a nerve.

What happened? Hundreds of other parents shared their experience of struggling to meet constantly rising nursery costs - with some paying more than one partner’s income just to ensure they were able to continue to work.

So how much does nursery cost right now? It depends where you live. The latest Coram Childcare Survey, published this year, found that childcare is most expensive in inner London, where part-time care costs parents of children under the age of two at least £199 a week. The cheapest region in England is Yorkshire and Humberside, averaging £129 a week for a part-time nursery place.

That was last year... what about now? According to the Early Years Alliance, full-time nursery fees will rise by at least £1,000 a year during 2023. That’s in line with the rises reported by parents sharing their stories on social media. Full-time fees for a child under two are expected to reach an average of £14,000, adding to the cost of living crisis for parents.

That’s a lot of money. Last year, two-thirds of working parents with pre-school age children were spending more on childcare than their mortgage, the Daily Telegraph reported, with that proportion set to rise along with fees. And childcare can also affect a family’s ability to get a mortgage in the first place, according to Grazia, with brokers and banks placing particular emphasis on nursery or childminder fees in their affordability checks.

How can nurseries get away with it? They have no choice but to ask for more money, as their own operating costs are rising rapidly too. According to the Early Years Alliance, half of childcare settings recorded a loss in the last year, with the average loss reaching £14,000. Only two in 10 broke even.

Doesn’t state funding for early years education help? The funding provided by the government to support older pre-school children to receive 30 hours of free childcare a week during term time doesn’t meet the cost of offering those places. Almost every nursery surveyed by the Early Years Alliance said the government funding was insufficient to meet the cost of subsidised places. More than four out of five (83%) said the level of government funding they receive for the three-and-four-year-old early entitlement offer is less than the cost of delivering places.

So what is the government doing about it? In his March budget, chancellor Jeremy Hunt promised to offer 30 hours of funded childcare during term time for all children aged between nine months and two years by 2025, cutting costs significantly for working parents. However, the plans have been criticised by childcare providers who say funding levels for the offer are still too low, meaning many settings will either close or choose not to offer any government subsidised hours at all. Prime minister Rishi Sunak is expected to call a general election by the end of 2024, and with his party lagging behind Labour in the poll, it could be unlikely he will have to deliver on this pledge.

Oh, right. So what is Labour saying in response? The party had previously offered high quality childcare within walking distance of the home from the end of parental leave until school begins, but Labour leader Sir Keir Starmer has not matched the Tories’ offer of 30 free hours from nine months of age. The lack of detail is making nursery managers nervous. “I fully accept that they want to sit on the detail, but it feels like we’ve been in the longest election cycle ever,” Sarah Ronan, acting director of the Early Years and Childcare Coalition, told Yahoo News UK. “Any party that wants reform needs to bring the sector with them.”

Will this affect the birth rate? Lots of younger people are now worried that they can’t afford to have children in Britain. The UK’s birth rate is already declining, a problem which is worrying politicians.

But according to social geographer, Professor Danny Dorling, data from other European countries with highly-subsidised systems shows that fixing the childcare crisis won’t be enough to solve it. “What you can’t say is that providing better funded state childcare results in more people having children,” he told Yahoo News UK. “The UK has one of the highest rates of having kids in Europe.”