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Some parents are spending more on childcare than their mortgage

Mark Dorman
Putting children into nursery care can push families to the financial brink (Matt Cardy/Getty Images)
Putting children into nursery care can push families to the financial brink (Matt Cardy/Getty Images)

Some parents are parting with more than half of their salary each month on childcare.

In some areas of the UK, households are having to spend more on putting their child or children into nursery care than on their mortgage.

London is the most expensive city, with average fees an eye-watering £1,383 per month, almost £600 dearer than Glasgow.

Where do parents pay the most childcare in relation to their salary?

Ranking

Area

Average monthly childcare cost

Childcare as a % of one average salary

1

Bristol

£1,142

55.5%

2

London

£1,383

55.2%

3

Newcastle

£935

53.2%

4

Southampton

£1,050

51.8%

5

Nottingham

£978

50.9%

6

Birmingham

£1,005

46.6%

7

Cardiff

£930

45.2%

8

Liverpool

£860

44.3%

9

Plymouth

£884

44.2%

10

Edinburgh

£950

43.0%

11

Manchester

£892

42.7%

12

Cambridge

£933

40.9%

13

Glasgow

£799

40.8%

Meanwhile, average childcare fees in Bristol tot up to £1,142 and Southampton to £1,050 making them the second and third most expensive cities, the research by Admiral Loans showed.

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The investigation also revealed that a parent could be spending between 41% and 56% of their net wages covering childcare costs, leaving them an average of £1117 a month to cover mortgage or rent, council tax and household bills, groceries, transport and other costs associated with raising a child.

It means that for couples who are both going out to work, more than a quarter of their joint income might need to be set aside each month for childcare.

For single parents, more than half of their earnings could be lost before they’ve even begun to pay for necessities and other bills.

Mortgage + childcare – how much is left?

Ranking

City

Average monthly take home salary

Average monthly mortgage payment

Salary left after childcare and mortgage costs paid

1

London

£2,505

£3,450

-£2,328

2

Cambridge

£2,282

£2,355

-£1,006

3

Southampton

£2,025

£1,803

-£828

4

Bristol

£2,059

£1,393

-£476

5

Newcastle

£1,757

£937

-£115

6

Edinburgh

£2,208

£1,194

£64

7

Nottingham

£1,920

£872

£69

8

Cardiff

£2,059

£1,047

£82

9

Plymouth

£1,998

£877

£238

10

Birmingham

£2,156

£861

£291

11

Manchester

£2,090

£889

£309

12

Liverpool

£1,940

£724

£356

13

Glasgow

£1,958

£785

£374

In five of the 13 cities examined – Birmingham, Plymouth, Liverpool, Nottingham and Glasgow – monthly childcare bills were found to be higher than average mortgage payments.

And in London, Cambridge, Southampton, Bristol and Newcastle, an average worker would not earn enough to cover both full-time nursery costs for one child and average mortgage payments.

This means families, particularly those with single parents, could be at risk of falling into debt if they want to continue with their careers past parenthood, or else be forced to stay at home because it is not financially viable.

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Scott Cargill, UK CEO of Admiral Loans, said: “Our research shows the cost of childcare can be a huge burden on new families.

“Parents who have taken maternity or paternity leave may already be under financial pressure after being on a lower income during their time out of the workplace and may be squeezed even more when the cost of childcare kicks in.”

Two children in childcare – the costs

Ranking

City

Monthly childcare for two children

Wages left after paying for childcare for two children

1

London

£2,766

-£261

2

Bristol

£2,285

-£226

3

Newcastle

£1,870

-£112

4

Southampton

£2,100

-£75

5

Nottingham

£1,957

-£36

6

Birmingham

£2,009

£147

7

Cardiff

£1,860

£199

8

Liverpool

£1,720

£220

9

Plymouth

£1,768

£230

10

Manchester

£1,785

£306

11

Edinburgh

£1,899

£308

12

Glasgow

£1,598

£360

13

Cambridge

£1,867

£415

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And, Stuart Carmichael, of the charity Debt Support Trust, said that while efforts have been made to make it more affordable for parents to return to work after the birth of a child, for low income families, the financial benefit can be very limited.

He added: “We are concerned that more people could be turning to high interest, short-term loans to bridge financial gaps, which are a temporary solution at best and could lead to additional stress and worry further down the line.”