Working parents are being crippled by childcare costs with one in five North parents effectively working for nothing, figures today reveal.
New research suggests more than a third of parents in the region with children aged up to five say that one earner brings home less than £100 a month after childcare costs have been paid.
The typical amount brought home by the lower earner in a household is £212.50 after childcare and work costs have been taken into account.
Businesses have now called on the government to extend childcare support for parents with children aged one and two.
The CBI employers’ organisation said that this, and better paid jobs in the North East, would help raise family incomes and get more adults into work.
Regional head of the CBI, Dianne Sharp, said:
“In the aftermath of recession, more jobs were created in sectors with below median wages than jobs in sectors with above median wages.
> And who by ? How many of these low wages were decided by CBI members ?
“Childcare costs will remain a problem if the region fails to provide higher skilled and better paid jobs.
“Work has to pay and it’s regrettable if childcare costs are preventing parents getting back into work.
“This means we need a long-term, coordinated commitment from government to provide affordable, accessible childcare for all so that parents who choose to can maintain contact with the labour market.
“Reducing the cost of childcare for parents is important, but so is increasing the flexibility of hours that it’s available for.
“As the UK’s labour market has developed, a 9-5 approach still predominates in childcare. Nurseries are increasingly offering 8-6, but we need to see more provision of wraparound care in schools through breakfast and afterschool clubs.”
According to the research, by insurer Aviva, about 34% of parents with children aged up to five said they used childcare to enable them to go back to work.
Of these, 48% use a paid for nursery, 33% use a school, 41% turn to grandparents and just 4% use a childminder.
Beth Farhat, regional secretary of the Northern TUC, said:
“There is a lot of pressure on women to return to work early because they feel their future career and earnings will be jeopardised if they don’t, but the affordability of childcare makes things incredibly difficult.
“Childcare bills can place a huge strain on many families’ finances and that is one of the reasons why the TUC believes Britain needs a pay rise.
“TUC analysis has shown that once inflation is considered the real value of the average full-time wages has fallen by £2,500 since 2010 and that understandably has consequences for more and more families, particularly with young children.
“These figures from Aviva show that over a third of parents in our region are effectively be working for next to nothing after their childcare costs are taking into account.
“It would be a tragic waste of talent in our region’s labour market to lose out on people who want to work but can no longer financially justify it.”
Source – Newcastle Evening Chronicle, 07 Jan 2015
Almost a MILLION working parents are being forced to skip meals so that they can afford to pay the rent or mortgage, shocking new figures reveal.
A survey by YouGov, on behalf of the housing charity Shelter, has revealed that more than one in ten working families are going hungry to pay housing costs, while over a third admit they have cut back on buying food.
36.7% said they had cut back on how much they spend on food and 12.9% had put off buying shoes for their children. 9.7% said they had delayed purchasing school uniforms.
Government figures show that households spend, on average, 28% of their total income on housing costs. This rises to 40% in the private rental sector.
Shelter highlights the story of Katherine and her husband who both have full-time jobs but still struggle to pay their mortgage. “My husband and I don’t have breakfast because we can’t afford it, and we miss evening meals two or three times a month to help with the mortgage”, Katherine said.
She added: “We’ve really had to cut back on the basics, and I even had to send our daughter to school in an old uniform that I knew was too small; it made me feel horrible. We are already at breaking point, so I honestly don’t know what we’d do if our financial situation got worse; it really frightens me.”
Campbell Robb, chief executive of Shelter, said:
“No parent should be forced to choose between putting food on the table and paying for the roof over their children’s heads. These shocking figures show that millions of us are having to make these kind of agonising choices every day.
“Sky-high housing costs and cuts to support are leaving many families trapped on a financial knife-edge.”
Shadow Work and Pensions Secretary Rachel Reeves said: “This report provides shocking new evidence of how the Tories’ cost of living crisis is hitting hard-working families.
“While David Cameron says the economy is fixed, people who put in the hours to provide for their children are finding it harder and harder to make ends meet.”
The number of calls Shelter receives related to rent arrears has more than doubled in the last three years, and the majority of people regarded as living in poverty in the UK are in work.
Citizens Advice Chief Executive Gillian Guy said:
“Housing costs have left some families standing on a financial cliff edge. Working households that have already cut back on spending to get by could find themselves in the red if interest rates go up.
“Citizens Advice research shows 3 in 5 households are worried about the impact of rising bills this year, with over half forced to cut spending to balance the books.
“The competing pressures of sky-high childcare bills, rising energy costs and wages which are consistently below inflation, mean many people are struggling to pay for the roof over their head.
“Citizens Advice dealt with nearly 87,000 social housing rent arrears problems last year, up 10 per cent from 2012.
“It is welcome news that more people are in work, putting more households in a position to get on top of their bills. However, with record numbers of people becoming self-employed and increased numbers of jobs with uncertain hours, families face increasing instability in their income.
“An interest rate rise would put some in a more precarious position, so any rise needs to be slow and steady in order for families to manage the extra cost.”
According to the latest figures, there has been a 19% rise in cases of malnutrition in the UK over the past twelve months. Food prices have risen by 12% in seven years, while average wages have only increased by 7.6% over the same period.
Tory Housing Minister Brandon Lewis said: “Contrary to Shelter’s claims, repossessions are actually at their lowest since 2007 and down almost a third since last year.
“Our efforts to tackle the record deficit we inherited have helped keep interest rates at a record low, meaning home ownership is at its most affordable since 2007 while private rent levels are falling in real terms.”
Source – Welfare News Service, 28 Aug 2014