THOUSANDS of parents are feeling forced out of the workplace because of the rising cost of childcare, Aviva has warned.
A new study from the York-based life insurer shows that 22 per cent of Yorkshire families with dependent children have seen at least one parent give up work because childcare costs were wiping out their wages.
A further 24 per cent of Yorkshire families with working parents have reduced their working hours for the same reason.
The research shows that a full-time working mother with two children could be bringing home just £135 a month after she has paid out all the costs associated with working and day care.
Louise Colley, product distribution director at Aviva and a mother of six-year-old twins, said: “This study shows clearly that the dilemma of ‘to work or not to work’ is very real for thousands of UK families.
“With childcare fees and the cost of commuting steadily rising, it’s a real consideration for many two-parent families as to whether a second salary will actually mean the household is better off, particularly if there is more than one child requiring day care.”
She welcomed the Government proposal to provide up to £2,000 per child towards childcare if both parents are working. It is set to be introduced in autumn 2015.
Ms Colley added: “Many families may decide that it makes financial sense for one person to look after the children while the other acts as the breadwinner.
“This is a practical solution but it can also leave families vulnerable should anything happen to that income earner, if they don’t have adequate protection in place.
“We’d strongly urge all families to consider the ‘what ifs’ and take steps to make sure they’re covered.
“After all, we go out to work to provide for our families but without protection, they could be left financially exposed.”
An analysis of childcare costs reveals the financial struggles that many working parents face, with typical full-time nursery care of a child under five costing £977 per month.
When children start school, the costs often continue, with out-of-school care costing an average of £152 per month.
While 42 per cent of families say they don’t use childcare and 38 per cent say their family and friends provide this for free, those parents who do pay can find it difficult to juggle their finances.
In addition to childcare and schooling costs, the average working family member spends £334 per month on expenses associated with employment such as transport, food and clothing, according to Aviva.
The insurer said single income families leave themselves exposed if the main breadwinner is unable to work for any reason.
Should the average family lose one income, they say they would look to cut spending to a minimum (38 per cent), turn to the Government for help (22 per cent) or dip into their savings (31 per cent).
Although with average household savings at just £2,773 – typically less than two months’ income – this is unlikely to last long.
If they were faced with a permanent loss of an income, families’ immediate worries would be about meeting their bills (55 per cent), maintaining their standard of living (41 per cent) and being forced to move home (28 per cent) – all stressful issues at a time of need.
Children are also a major concern in this scenario, with 24 per cent of parents worried about how this might impact on their behaviour and 19 per cent concerned about their performance at school.
The figures were developed using data from the Family and Childcare Trust combined with data sourced from a survey of 2,039 adults carried out by ICM research for Aviva in March.
The trust said part-time childcare costs now outstrip the average mortgage bill.