This report by the Institute of Fiscal Studies discusses how the cost of childcare has changed over time, and how it varies across the country and between different types of families. It show that England remains an expensive country for childcare even after correcting for the most significant issues.
Early education and childcare can have a critical impact both on helping children to develop and in supporting parents to work. But childcare can also have a significant impact on the disposable income – and, hence, living standards – of families with very young children.
England remains an expensive country for childcare. This could be linked to staff-to-child ratios that are tight compared with most European countries, though there are trade-offs in setting these legal limits that could justify this policy choice. And, while there is a wide range of government support for early education and childcare in England, the take-up rates differ widely across these programmes.
The focus in this report is on the cost of childcare and the extent to which government support helps families manage these costs.
A key finding is that more than half of families with pre-school-aged children pay nothing in childcare fees. Greater support with childcare costs could help these families use more formal childcare, but will do nothing to ease existing pressures on their budgets.