Cost of living varies by region
This potential regionalisation of welfare is just one of the many aspects the government is discussing in its bid to reduce the welfare bill and the national deficit. Whether it proves a palatable change or a political hot-potato remains to be seen, but it has highlighted the variations in the cost of living across the UK.
Be it salaries, house prices, rents, travel expenses, etc. the incomes and outgoings of families vary considerably depending on where you live. This has been further highlighted in a report published by children's saving provider, Family Investments, detailing the cost of childcare across the country.
Local authority survey
The report surveyed 124 local authorities and official earnings data to determine a league table of affordability for every county and town. On average it found that families pay almost a fifth (18.9%) of their earnings on childcare each week, highlighting the extent of the burden of childcare costs for working families.
There was good news for those living in Stoke – deemed the most affordable place in Great Britain for childcare – and the West Midlands, which proved to be an affordability hotspot with four of the ten most cost-effective urban areas in the region.
But for others, the data shows what they probably already know: that childcare is an even more substantial outgoing. Ebbw Vale in South Wales won the unenviable accolade of being the area where childcare costs relative to earnings was the highest. There childcare costs (based on a parent paying for 25 hours a week of care) were the equivalent of 28.2% of earnings at £5,539 a year. This compares with 13.7% or £2,925 a year for a parent in Stoke.
"For many parents childcare costs are almost as much of a burden as their mortgage or rent and this can put families under considerable financial strain."
For many families this is a cost that comes out of their taxed income, unless they are lucky enough to work for an employer signed up to the childcare voucher scheme.
Childcare costs - a large expenditure
Childcare costs are an inherent expense for most families – according to the most recent census data 77% of all UK parents are working – and these figures show just how large a proportion of their income has to be spent on it. For many parents, childcare costs are almost as much of a burden as their mortgage or rent and this can put families under considerable financial strain. It's not surprising that 'we can't afford another child' is such a familiar cry from parents after their first is born.
This report comes as valuable information for parents, especially at a time when the government puts so much focus on getting women back in work, yet there is still so little provision for flexible working and affordable childcare options. The findings are particularly interesting as they do not fall into the classic constrictors of the North/South divide. While there are two London boroughs in the top ten – or should that be bottom ten – urban areas ranked least affordable, there are also two in Wales, two in the North East and the rest are scattered across the UK.
It really does show the complexity of factors that affect affordability, and while this report may offer little solace for hard-pressed working families, it does offer genuine insight into regional variations.
Note: Whilst we take care to ensure Hub content is accurate at the time of publication, individual circumstances can differ so please don’t rely on it when making financial decisions. OneFamily do not provide advice so it may be worth speaking to an independent financial advisor about your own circumstances.