New research by pension provider, Penfold, shows that the average cost of childcare for under-twos in Scotland could hit £58.60 a day and £1,165.95 per month by April 2023. Although this is still lower than the UK average there are growing concerns about the impact the increase could have on parents as nursery fees continue to rise.
A recent survey of 1,156 UK nursery providers by the Early Years Alliance revealed that almost nine in 10 said that they would ‘probably’ or ‘definitely’ increase their fees in 2023. This could see early years providers increase their prices by an average of eight per cent, suggests Penfold.
Penfold has investigated the growing cost of childcare for under-twos in full-time nursery care at over 800 day nurseries across the UK and found that the average cost to put your child into a nursery full-time is £55.39 a day or £1,106.52 a month.
According to the Annual Survey of Hours and Earnings published by the Office for National Statistics (ONS) in 2021, the median gross weekly earnings for full-time employees in Scotland was £599 per week, or the equivalent to approximately £2,596 per month.
Based on these figures, the average cost of full-time nursery care for under-twos of £1,106.52 per month takes 42 per cent of the average wage in Scotland, suggesting that childcare costs can be a significant financial burden for many families.
Most expensive places to have a child
The average cost in the UK to put your child into a nursery full-time is £55.39 per day or £1,106.52 per month.
Scotland is in the middle of the pack, with an average cost per day of £54.26 and £1079.59 per month.
The cheapest country to put your child into nursery was Wales, with an average of £46.46 per day and £929.38 per month.
Scotland average nursery costs
- Average cost per day: £54.26
- Predicted 8% increase: £58.60
- Average cost per month: £1,079.59
- Predicted 8% increase: £1,165.95
UK average nursery costs
- Average cost per day: £55.39
- Predicted 8% iIncrease: £59.82
- Average cost per month: £1,106.52
- Predicted 8% increase: £1,195.04
Top 10 most expensive regions in Scotland
Scotland has one of the least expensive average costs overall, however, the most expensive county was Aberdeenshire with an average cost per day of £67.10 and £1,341.98 per month.
Average costs by region
- Aberdeenshire: £67.10 per day, £1,341.98 per month
- Edinburgh: £63 per day, £1,269 per month
- Midlothian: £62 per day, £1,240 per month
- East Lothian: £58 per day, £1,167 per month
- Glasgow: £56 per day, £1,116 per month
- Highland: £55.35 per day, £1,107 per month
- Stirling: £55 per day, £1,108 per month
- Moray: £53.50 per day, £1,070 per month
- Perth and Kinross: £53.20 per day, £1,064 per month
- Falkirk: £53 per month, £1,059 per month
Top 10 cheapest regions in Scotland
The cheapest region was Argyll & Bute with an average cost of £41.63 per day and £832.67 per month.
Average costs by region
- Argyll & Bute: £41.63 per day, £832.67 per month
- Angus: £50.28 per day, £1,005.50 per month
- Ayrshire: £50.97 per day, £1,019.48 per month
- Scottish Borders: £51 per day, £1,025 per month
- Fife: £51.66 per day, £1,033.16 per month
- Renfrewshire: £52 per day, £1,036 per month
- Dunbartonshire: £52 per day, £1,040 per month
- West Lothian: £52.59 per day, £1,051.70 per month
- Lanarkshire: £52.68 per day, £1,053.64 per month
- Falkirk: £53 per day, £1,059 per month
Penfold says that these affordable nursery options could provide much-needed support for families with young children, especially those on a tight budget.
Impact on future savings
For a 30-year-old, £357 per month needs to be saved, or £4284 per year to save enough for retirement, according to Penfold.
It said that as the cost of living continues to rise, parents should not have to choose between providing for their children in the present and securing their retirement in the future.
Pete Hykin at Penfold, explained: “The increase in childcare costs is pushing parents, especially mothers, out of full-time roles which stunts their career options but also widens the savings gap as they’re less able to contribute to their pension pots.
“The maternal pay gap which measures the wage difference between mothers and non-mothers is growing and with this increase in nursery fees and lack of support, this will continue to grow.”
He continued: “The biggest contributor to the gender pension gap is that women spend more time than men outside of paid employment doing unpaid caring, for example looking after young children or taking care of elderly relatives.
“Women perform 60 per cent more unpaid work than men on average and as a result, mothers make up the majority of part-time workers, they frequently do so to care for their children or other persons. Unfortunately, they pay dearly for attempting to strike a balance between these two positions.”
Tax-Free childcare
HM Revenue and Customs (HMRC) can help save families up to £2,000 a year on childcare.
More than 24,900 families in Scotland used the scheme in September 2022 and benefited from the UK Government paying towards childcare costs.
HMRC regularly encourages families to find out more about Tax-Free Childcare and check their eligibility on the Childcare Choices microsite on GOV.UK here.
Tax-Free Childcare can help working families pay for any approved childcare for children aged 11 or under, or, 16 if the child has a disability - whether the child goes to nursery, a childminder, attends breakfast or after school club, has holiday care or goes to an out of school activity.
For every £8 paid into an online account, families will automatically receive an additional £2 from the UK Government.
Parents can receive up to £500 every three months, the equivalent to £2,000 a year, or £1,000 (£4,000 a year) if their child is disabled.
Opening a Tax-Free Childcare account is simple and takes around 20 minutes. Money can be deposited at any time and can be used straight away, or whenever it is needed. Unused money in the account can be withdrawn at any time. Go to GOV.UK here to register and get started.
Eligibility for Tax-Free Childcare
Families could be eligible for Tax-Free Childcare if they:
- have a child or children aged 11 or under. They stop being eligible on 1 September after their 11th birthday. If their child has a disability, they may get up to £4,000 a year until 1 September after their 16th birthday
- earn, or expect to earn, at least the National Minimum Wage or Living Wage for 16 hours a week, on average
- each earn no more than £100,000 per annum
- do not receive Tax Credits, Universal Credit or childcare vouchers
A full list of the eligibility criteria is available on GOV.UK here.
Families can learn more about the childcare offers available to them and what support they’re entitled to by visiting Childcare Choices here.
To keep up to date with the latest cost of living news, join our Money Saving Scotland Facebook page here, or subscribe to our newsletter which goes out daily, Monday to Friday - sign up here.
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