Parents are relying on credit to fund pre-school childcare

More than a quarter of parents with young children are relying on credit to fund rising childcare bills, a report has warned.

Parents are relying on credit to fund pre-school childcare.
Parents are relying on credit to fund pre-school childcare.

Families often have to repay the debts over a period of months or years to recover financially from the cost of pre-school care such as a nursery or child minder once their children go to school.

According to research by credit report provider, families tapping into credit whilst their children are in nursery accrue on average £9,220 of debt before their children reach primary school age – with the average amount of time taken to pay the loan back at 16 months.

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Parents say they have had to cut back on luxuries such as holidays and leisure activities to afford childcare, while a fifth said they had decided not to purchase a big-ticket items such as a new car, kitchen appliances or furniture. Only 27 per cent said they did not have to cut back on any of these.

Almost three quarters of parents with children in pre-school childcare have reported increased costs from their providers over the last 12 months, with the average monthly cost of childcare for a child before school now sitting at £1,042 per family. Parents report that the cost increases are being justified by providers as a response to inflation, wage growth or Brexit uncertainty.

Jacqueline Dewey, managing director at, said: “Parents might not be putting childcare bills on credit directly, but a significant number rely on credit during these years as childcare costs put strain on their disposable income.”

In some cases, higher nursery costs even meant that going out to work no longer financial sense, with half of families saying they or their partner had to reduce their working hours to provide childcare.

Last week, it emerged that some nurseries in Scotland are already pulling out of funding partnership agreements with their local council – worth thousands of pounds to parents – as restrictions placed by the Scottish Government as the number of state-funded hours for nursery children is almost doubled make it no longer financially viable to continue.

More than half of parents said they were underprepared for the financial cost of childcare and a similar number claimed that the years they relied on childcare have been or are currently the most financially challenging time of their lives.

Over 1,000 parents were interviewed for the survey.