8 Sep 2015
London parents risk little or no gain from working more hours
London childcare costs leave many parents on the minimum wage little or no better off for working more, a Loughborough social policy expert has warned.
In his report Children in London – The extra cost, Donald Hirsch from the Centre for Research in Social Policy finds most of the costs children bring are similar in and outside London, but the capital’s housing and childcare costs associated with kids are dramatically different from the rest of the UK.
While many London parents think it’s essential to work full-time to make ends meet, high childcare costs can mean they are not better off if they do – especially when children are young.
The report finds a parent with one child working on the minimum wage in London would be around £4 a week worse off if they increased their working hours from 32 to 33 hours because of high childcare costs. Outside of London, a parent in the same situation would gain 62 pence currently or £1.16 under Universal Credit from April 2016.
Childcare can cost 50% more in London than elsewhere in the UK and full time care (30-plus hours) for kids in the capital exceeds the cap on the help available with the costs.
And with the cap on help with costs unchanged for a decade - and at a level well short of actual costs - the extra net cost of childcare for London families currently claiming tax credits is up to double the cost outside the capital, the report says.