The second mortgage: How Britain's soaring childcare costs leave parents unable to afford to work

By ITV News content producer Talia Shadwell

Amy, 32, imagines her household’s finances would look good “on paper.”

She owns a home in St Neots, Cambridgeshire, with her husband, and the couple share a 10-month-old daughter, named Autumn.

Amy is the main breadwinner in her family.

She works as a payroll analyst in the pharmaceuticals industry, he works part-time in warehouse logistics.

Her husband, who is in his late 30s, had been made redundant before the pandemic, but as conditions eased he got a new job - and they thought they were back on track.

The couple decided they were ready to start a family and determined it made sense for him to reduce his hours to part-time to care for their new baby, while Amy - as the higher earner – returned to work fulltime.

But just months after their first baby was born, Amy felt she had no choice but to cut her maternity leave short and head back to work.

As the cost of living crisis sharpens, the couple now finds themselves anxiously considering whether they will be forced to walk away from the family home.

A looming nursery bill, mortgage rates hikes, and energy costs crisis have left the couple -who had considered themselves a typical, middle-income household - rapidly approaching a cliff-edge.

Like households up and down the country, they are finding themselves in the eye of a perfect storm.

Their fixed mortgage rate is up in spring, and average new rates are rocketing above 6% for the first time since the 2008 financial crisis, as lenders react to markets volatility triggered by the Truss government’s ‘mini-budget.’

The couple have estimated their mortgage bill will increase by at least £500 a month.

Rising food prices are driving inflation, adding around £40 a week to the family-of-three’s grocery bill.

But the option of both parents going back to work to cover their increasingly expensive outgoings is hampered by the cost of childcare.

If Amy’s husband was to return to fulltime work, the couple could boost their income.

She presently works extended fulltime hours in a four-day week to give her a day at home with their daughter, and her mum helps with childcare.

But no matter which way the parents look at their budget, they are finding they simply cannot both afford to go back to fulltime work – as the childcare bill would consume so much of the household income as to render the move worthless.

Amy told ITV News: “My genuine worst-case scenario is I’m going to have to sell my house and move back in with my parents if my energy bills and mortgage go up too much.”

How did childcare become so expensive?

Stark figures show the cost of childcare for a typical family has shot up by £4,000 in the space of just 12 years.

The fee increases come as the childcare sector warns the government it is on the “brink of collapse.”

An industry-wide recruitment crisis, a gap in government cash to support nurseries to offer 'free' nursery places, soaring energy bills, and as-yet unanswered calls for VAT and business rates relief, have all collided to force centres to shut their doors, according to the National Day Nurseries Association's warnings.

The latest figures show a two-thirds increase in the number of nurseries closing this summer compared to the same time last year.

All this has led to a squeeze on nursery spaces for parents like Amy and her husband, who find themselves among parents absorbing the rising fees passed on by centres treading water.

Ousted chancellor Kwasi Kwarteng hinted at an announcement in his mini-budget in September, saying the government would outline policies to make childcare “cheaper.”

Markets turmoil forced the government to bring forward its medium-term fiscal plan outline to Halloween, before Liz Truss resigned .Chancellor Jeremey Hunt has confirmed that the government will delay the financial statement to 17 November.

New Prime Minister Rishi Sunak has vowed to clean up the mistakes” of Ms Truss’s short tenure - and warned of “difficult decisions” ahead.The new premier faces boiling public anger over the cost of living crisis.Families already struggling with rising mortgages, and a rental crisis, say the cost of childcare is forcing them out of work - as the fees out-price their earnings.

As parents and the childcare industry brace for the government’s next move, thousands of mothers have had enough.

The advocacy group Pregnant Then Screwed (PTS) will hold a nationwide protest in 11 major centres around the UK this weekend.

More than 12,000 are already signed up for the March of the Mummies on Saturday, 29 October, which is expected to attract at least 6,000 demonstrators in London alone.

The rally is focused on childcare costs and parental leave inequities, and their disproportionate effects on women - who campaigners say are still shouldering the bulk of the burden.

‘Childcare is like a mortgage payment’

Some parents are finding themselves with little option but to take unpaid leave to cover gaping childcare gaps.

Antoinette Johnson, a self-employed solo mother-of-two living in Brent, north London, found herself in a difficult situation this summer when her nursery closed down for the holiday break.

She told ITV News that childcare centres’ hours - unmoored from typical working patterns - has forced her to rely on family  — or even take unpaid time off.

Her three-year-old daughter is in nursery, and her sixteen-year-old son, who has learning difficulties, is in school.

Atnoinette has found ways to juggle nursery pick-ups by working parts of her day from home when she can – and family members help with the rest.

But this summer, the freelance social care family support worker‘s carefully choreographed timetable simply fell apart.

Her daughter Ayaniha’s nursery closed down for the month of August, so workers could have a break and do training.

“It’s a hard job looking after all those children, and I understand them having to close for the months so they can spend some time with their own families,” Antoinette said.

“I don’t mind – it’s a good thing, because you want the best childcare, and I want to know that the person looking after my child is 100 per cent dedicated and not too tired.

“But it does impact on me, on the whole, because the summertime is a busy period for me for work.”

“Because I’m self-employed - if I don’t work, I don’t get paid.”

Antoinette finds specialised holiday care for her son Atwain, 16, difficult to access – and is interested in sending her daughter to pre-school - as it would be cheaper. But she is finding it somewhat of a postcode lottery.

The local pre-school offers options of a morning session; 9am to noon, or afternoon session; noon to about 3.15pm – or both.

But even full-time pre-school is still shorter than a typical work day – and with no partner to juggle pick-ups, Ms Johnson just doesn’t see how she is supposed to make it work.

“You can have someone pick up your child, like a friend or grandparent, if you’re lucky enough, but what job do you have that you can pick up at that time?”

She cherishes family wellbeing centres – but says they are in decline, as at least half the hubs in her local area have closed.

Antoinette has been energised into action - and is involved in children’s charity Coram’s campaign calling for more funded, affordable nursery places, training for early education staff to help children with additional needs, and for better pay for early years workers.

But this winter will be a challenge for her family, as costs rise across the board. Antoinette and her children lease an old Victorian home that is difficult to keep warm.

And like many tenants in the capital, the family's rent is being increased – not by too much, but enough of a hike to be another pinch on the solo mum’s budget.

For Antoinette, the parenting bill just doesn’t add up: “Childcare is like a mortgage payment.”

‘It feels like you’re making a sacrifice to have a family’

Lee Adams is a school teacher, and her partner is a Black Cab driver. They share two-year-old daughter, Isla, and will welcome their second child next month.

The family lives in Epsom, Surrey, where Lee describes nursery costs as “astronomical.”

The couple consider themselves to have a decent household income, but feel daunted by the mounting cost of childcare ahead of them.

Putting their daughter into childcare three days a week is already costing nearly half their joint income, while Lee is on maternity leave.

When Isla turns three next month she will become eligible for a 30-hours free nursery place.

But because Lee is a teacher, they are negotiating with the nursery to use the hours during term time only - instead of stretching the government's 38-week offer pro-rata to cover 52 weeks of the year.

They are currently spending £93 a day sending Isla to nursery, including food and nappies, after the fees recently increased by about £6 a day.

They count themselves lucky to have family nearby who are able to support them with childcare, and they also get some help from the government’s Tax-Free Childcare scheme – clawing back roughly 20% of their current annual spend of around £10,000 in nursery fees.

The family learned about the scheme “by accident” from other parents – by which point they had already missed out on credits they could have claimed earlier.

HMRC’s latest figures show a record number of families claimed the support worth up to £2,000 annually in the financial year ending 2011/22 – rising from more than 374,000 claimants to over 512,000.

But the analysis also found the government was massively underspending - at least 1.3million households are thought to be eligible - suggesting hundreds of thousands of families were missing out on money they may not even realise they are entitled to claim.

Because Lee and her partner earn above a certain threshold, the tax-back scheme is the only support they are entitled to until Isla turns three.

As a result, Lee thinks she will probably be back at work by July, well before her maternity leave entitlement actually ends.

She thinks it is likely she will need to drop her hours to part-time to save on childcare costs – as that’s “more affordable” than sending Isla to nursery, even with the funded 30-hours.

Lee loves spending time at home with her daughter, but explains it doesn’t really feel like a choice.

“I want to be at work and to be able to progress my career, I feel like I worked so hard to become a teacher and work my way up, I don’t want to put my life on pause for years just to afford childcare.”

“It’s unaffordable. It’s almost like I’m paying to progress my career.”

The couple's incomes have not gone up to match recent rises in costs, or to cover rapidly inflating grocery prices and energy bills.

And the government’s energy discount scheme hasn’t stopped the family worrying about their “scary” winter bills.

Lee feels the government wants to encourage women to have careers - yet she feels everything is stacked against mothers' return to the workplace.

“It sort of feels like you’re making a sacrifice to have a family.”

‘Nothing has changed’

For parents of children struggling with chronic ill health, special educational needs, or disabilities, accessing childcare can feel like a battle against bureaucracy itself.

When Florencia Galeano, who lives in Bristol, gave birth to her first daughter, Maia, at the height of the September 2020 lockdown, it quickly became clear they faced a difficult path ahead.

The first hint of complications emerged during a 20-week scan, and by four months, their doctors diagnosed their daughter with a genetic decision- a mutation in the Rad21 gene.

Maia's symptoms are “baffling” her doctors – who told the couple their daughter's condition was one of the “biggest conundrums” the hospital had ever seen.

“It’s been a bit of an enigma for the last two years,” Florencia says.

Maia has been in and out of hospital for weeks at a time since she was born. She has suffered from symptoms including severe reflux and vomiting, and endures intestinal feeding.

The little girl’s parents are rarely away from her bedside as she wakes them with the heartrending sounds of her agonised “screaming."

“My husband and I haven’t really slept in the last two years,” Florencia says.

Both parents work in technology, and say their employers have offered generous flexibility for them to care for their daughter around work.

Their application for Disability Living Allowance (DLA) was approved at the highest level, as Maia needs support at night, but Florencia describes the paperwork as overwhelming.

The family received a letter from the council in October suggesting Maia may be eligible for special free nursery hours due to her condition.

But that is complicated too – they will need to find a nursery with the resources to apply for funds for a trained key worker who has the expertise to handle Maia’s complex needs.

To fill the gap, the couple use a specialised nanny three days a week – partly covered by their DLA payments - who came recommended to them.

Florencia estimates that every three months they get around £500 back from the Tax-Free childcare, toward a quarterly bill coming to about £4,500 a round: “It’s not a lot but it helps.”

The cost means they cannot afford a specialised nanny fulltime, and so Florencia can only return to work only three days a week for now – leaving the family feeling penalised in every direction.

“Three days a week means we’re paying a quarter of the household income (on childcare) and yet neither me or my husband are earning fulltime salaries.”

Florencia rues the effect the time out of work is having on her career: “I love working, I like my job, and I like the people I work with… it’s not like I don’t love being with my daughter. It is full-on and exhausting with Maia (and) understanding her condition.”

She would like to see gaps filled in the provision for children with additional needs.

She fears if the Sunak government presses on with Ms Truss' reported ambitions to weaken nursery ratios, children like Maia could become unsafe as staff strain themselves to look after more children.

She “100%” supports advocates’ demand that free 30 hours a week nursery provision begins from the end of parental leave.

But the status quo has left the couple treading water.

“We’re always in the red at the end of the month,” Florencia says. “Right now it seems doable, but the prospect of how things are going seems to be more scary.”

Reversing the 'motherhood penalty'Pregnant Then Screwed campaigner Joeli Brearley founded the group after being sacked when she was four months pregnant.She believes both politicians and journalists are asking the wrong questions about childcare.

Figures from the Office for National Statistics (ONS) showed the number of women not working so they could look after children has grown by 5% in the past year, in the first sustained increase in nearly three decades of decline.

But figures also show women are having children later. For the first time since 2015, the number of live births in England and Wales increased annually in 2021 - but that still remained in line with the long-term downward trend.

Some commentary cites contemporary societal change: as women gained control over family planning and prioritised higher education and careers.

But others have pointed to years of stagnant wage growth, housing insecurity, and the costs of fertility-treatment, pricing all but the highest earners out of the opportunity to have children at all.

“The notion that women have any choice in this is fundamentally flawed,” Joeli tells ITV News.

“You don’t see politicians and the media saying ‘the reason the birth rate has ground to a halt is because the sacrifices women make to have children are astronomical’.” “Women are definitely waiting longer until they are more established in their career and when they can afford to have a child - and of course that window is narrow.

“People who are not feeling financially stable and are waiting well into their late 30s may then find it is too late - but that then is not a choice. They are not ‘choosing’ to have children later.”

Then, Joeli points out, there is the inequity around who does the caring – with statistics showing women still disproportionately shouldering the wide-reaching costs of time out of the workforce to care for children at home.

Joeli points to other countries that have reformed parental leave to help even the playing field. Like Iceland - which offers each parent six months leave, with six weeks transferable between them – paid at 80% of average income. As Joeli prepares to launch the March of the Mummies protests, hoping to train policymakers' attention on the “motherhood penalty,” she is not optimistic about the prospect of change, as the government lurches from crisis to crisis.

“I sort of feel like at the minute the government is throwing poo at the wall and seeing what sticks. It’s just chaos.”

“They seem to appreciate the costs are extortionate, and to want women back in the workforce. They seem to have got the message. But they don’t seem to have any idea of how it’s gone wrong – we have the second most expensive childcare in the world – what is going on?”

She rejects policy ideas the Truss government had reportedly been considering – including weakening childcare centre staff-to-child ratios, and paying childcare cash directly to families in lieu of funded nursery places.

Joeli says handing funds to families would not help cash-strapped nurseries lower their costs, and warned under-pressure families would feel they needed to divert any spare money to bills, and there would be a risk the money could be misappropriated by an abusive parent.Broadening nursery ratios could hinder recruitment, as stretched early years workers found themselves with even more children to look after, she says.

“It will only make childcare workers’ work more stressful, they are so badly paid and undervalued. Inevitably, it will just make that crisis get worse.”

PTS wants all childcare subsidies to begin at the end of parental leave and the government to boost funding so costs are capped at 5% of a household’s income. It also wants an increase in quality childcare, expanded Special Educational Needs (SEN) services, and for early childhood educators’ pay brought into line with schoolteachers’ remuneration to address staff shortages.

Responding to queries about what work was underway to address growing childcare expenses, a Department for Education spokesperson said: “We have spent more than £4 billion in each of the past five years to support families with the cost of childcare and thousands of parents are benefitting from government childcare support.

"Improving the cost, choice and availability of childcare for working parents is a key priority for this government. In July we set out our initial reform plans, including launching a consultation on staff to child ratios.

“We are exploring a wide range of options to make childcare more accessible and affordable for parents, but no decisions have been made.”

The Sunak government has signalled belt-tightening ahead, as it prepares to grapple with a multibillion-pound black hole in Britain's public finances.

But Joeli rejects any argument that the country cannot afford more spending, “Childcare is investment,” she insists. “It’s not a cost.

“All the evidence shows when you help women into work the economy grows...We need to invest in that infrastructure, so that parents can go back to work.”

Want a quick and expert briefing on the biggest news stories? Listen to our latest podcasts to find out What You Need To Know