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Working parents spend 35% of wages on childcare but employers are slow to help out, finds Hay Group


Childcare costs now take up a third of working parents’ salaries, according to Hay Group’s PayNet UK Salary Tracker.

It found in some cases, childcare can account for more than 35% of annual salary.

As childcare costs continue to increase, while wages have remained stagnant, parents are now spending a significantly higher proportion of pay on childcare than five years ago.

Clerical level workers in England will spend on average £103.19 per week on childcare in 2012, representing 35% of an individual's salary. In Scotland, parents can expect to pay £101.49 a week (34% of salary), and in Wales, the figure is £92.35 weekly.

Parents at this employee level in the South East of England are hardest hit, spending 36% of their £336 weekly wage on childcare in 2012.

Those in the South West will spend almost as much (35% of a £303 weekly salary) and Londoners only slightly less again (34% of the average £371 wage).

The least impacted region is the North West, though even here, parents can still expect to spend a considerable 29% of their £318 weekly earnings on childcare.

Even for those in professional level roles, childcare costs represent close to a fifth (18%) of average earnings in England, as childcare costs totalling £103.19 eat into average earnings of £565.

Scottish professionals can expect to pay out 18% of their £580 earnings on childcare, while parents in Wales face costs of £92.35, or 17% cent of their £550 earnings.

For clerical level workers, childcare costs have risen considerably over the past five years.

Parents are spending on average 5% more of their wages on childcare than they did five years ago.

Parents in Wales have felt the most acute pinch, spending 7% cent more than in 2007 - the highest rise anywhere in the UK.

Despite rising childcare costs eroding disposable incomes, less than half (46%) of UK employers currently offer any form of childcare support. Of those that do, the most common benefit is childcare vouchers (35%).

Adam Burden, reward information consultant at Hay Group said: "UK workers are feeling the pressure of juggling careers with family life, and with household budgets continuing to feel the squeeze, the rising cost of childcare presents another serious strain.

"Employers need to consider ways to help their workers with mounting childcare costs to ensure they attract and retain talent regardless of their childcare needs.

"Firms should consider offering childcare vouchers, flexible working and creative benefits, such as an onsite nursery, in addition to subsidised childcare. These can make a vital difference for employees with children."

Hay Group's PayNet UK Salary Tracker analyses pay and salary movements across five different employee levels in more than 700 organisations, representing over 1 million employees. Childcare data is based on the weekly cost of 25 hours of childcare for children under two years old, from the Daycare Trust Childcare Cost annual survey.