An hour of childcare in England costs 32% of the median pre tax hourly wage, according to a new childcare affordability ratio published today by the innovation charity Nesta.

London is England’s childcare affordability blackspot with an hour of childcare costing more than 40% of the median pre tax hourly wage in four boroughs. London accounts for seven of the top ten least affordable places in England. 

The costs become starker for lower earners. For a single earner on the London Living Wage (£11.95), the median cost of an hour’s childcare (£7.31) is equivalent to around 61% of median pre tax hourly income, or around 72% of post tax income. For a London earner on the national minimum wage (£10.42), the equivalent cost rises to 70% pre tax and 80% post tax. 

Pressure from the cost of childcare is not restricted to London. An hour of childcare in Manchester, Leicester and Herefordshire (all in the top ten least affordable) costs significantly less than an hour of childcare in London, but the median wage is also lower. As a result, childcare in these areas is as expensive relative to income as some of the most affluent parts of the capital.

Local authority Median hourly pay Median hourly cost of childcare for a two year old Childcare affordability ratio – age two
Hammersmith and Fulham 21.87 10 0.46
Kensington and Chelsea 21.34 9.5 0.45
Camden 20.29 9 0.44
Brent 17.30 7.2 0.42
Manchester 14.61 6 0.41
Haringey 19.03 7.5 0.39
Barnet 19.37 7.5 0.39
Leicester 13.43 5.2 0.39
Enfield 18.33 7.02 0.38
Herefordshire, County of 13.34 5 0.37

Areas in England with the highest childcare affordability ratio (source and full list)

The analysis uses a childcare affordability ratio which links the average hourly cost of childcare in every English local authority with the median pre-tax hourly wage in the area. 

The cost of childcare in the UK is almost twice the OECD average and many parents have seen significant increases in recent months as providers are forced to pass on rising costs. 

Tom Symons, Deputy Director of Nesta’s fairer start team said: “We know that families are really struggling and for many that means tough choices between giving up childcare or giving up work. This has a big knock-on effect on children and the economy. Good childcare helps children develop a whole range of valuable early life skills including literacy and numeracy, social and emotional development and communication. There is agreement across the political spectrum that the early years are vital but our childcare system is broken, expensive and in desperate need of reform.”

The analysis also found a stark shift in the early years workforce with a loss of 8,000 childminders in England since 2018 (down to 28,500). Childminders are often the most suitable option for parents who work irregular hours and need flexible provision. 

Ends

Notes to editors

  1. For more information on the analysis or to speak to one of the experts involved, please contact Mark Byrne, Head of Media and Marketing, on 07745 234 909 or [email protected]. Spokespeople are available for broadcast interviews.  
  2. View the report.
  3. View the full list of local authorities from highest to lowest affordability ratio.
  4. Calculating a childcare affordability ratio:
    The ratio is a measure of the price of an hour’s childcare to income ratio in an area. The median cost of childcare by local authority is published by the Department of Education and comes from the Childcare and early years survey of parents. This is divided by the median hourly wage for each local authority, taken from the annual survey of hours and earnings - resident analysis published by Nomis. Both are the latest available data at the time of publication (2022).

About Nesta

We are Nesta, the UK's innovation agency for social good. We design, test and scale solutions to society's biggest problems. Our three missions are to give every child a fair start, help people live healthy lives, and create a sustainable future where the economy works for both people and the planet.

For over 20 years, we have worked to support, encourage and inspire innovation. We work in three roles: as an innovation partner working with frontline organisations to design and test new solutions, as a venture builder supporting new and early-stage businesses, and as a system shaper creating the conditions for innovation.

Harnessing the rigour of science and the creativity of design, we work relentlessly to change millions of lives for the better. Find out more at nesta.org.uk

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