As part of a UK-wide investigation, the provider researched the cost of nursery fees around Britain, assessing average childcare bills against mortgage payments and salaries in 13 cities. The results show that parents are paying a significant portion of their earnings towards childcare – in some cases up to 55% of one person’s salary.
Parents in Glasgow are paying the least for childcare, with a full-time place for a child under two coming in at an average of £799 a month. This is followed by Liverpool at an average of £860 per month and Plymouth at £884. London is the most expensive, with average fees an eye-watering £1,383 per month, almost £600 dearer than Glasgow. Meanwhile, average childcare fees in Bristol tot up to £1,142 and Southampton to £1,050 making them the second and third most expensive cities, the research found.
The investigation also found that a parent could be spending between 41% and 56% of their net wages covering childcare costs, leaving them an average of £1117 a month* to cover mortgage or rent, council tax and household bills, groceries, transport and other costs associated with raising a child.
It means that for couples who are both going out to work, more than a quarter of their joint income might need to be set aside each month for childcare. For single parents, more than half of their earnings could be lost before they’ve even begun to pay for necessities and other bills.
The breakdown: Where do parents pay the most childcare in relation to their salary?
| Ranking | Area | Average monthly childcare cost | Childcare as a % of one average salary |
| 1 | Bristol | £1,142 | 55.5% |
| 2 | London | £1,383 | 55.2% |
| 3 | Newcastle | £935 | 53.2% |
| 4 | Southampton | £1,050 | 51.8% |
| 5 | Nottingham | £978 | 50.9% |
| 6 | Birmingham | £1,005 | 46.6% |
| 7 | Cardiff | £930 | 45.2% |
| 8 | Liverpool | £860 | 44.3% |
| 9 | Plymouth | £884 | 44.2% |
| 10 | Edinburgh | £950 | 43.0% |
| 11 | Manchester | £892 | 42.7% |
| 12 | Cambridge | £933 | 40.9% |
| 13 | Glasgow | £799 | 40.8% |
In 6 of the 13 cities – Manchester, Birmingham, Plymouth, Liverpool, Nottingham and Glasgow – monthly childcare bills were found to be higher than average mortgage payments. The price of an average house in each city** was used to calculate monthly payments, based on a 25-year term, with 95% loan-to-value.***
And in London, Cambridge, Southampton, Bristol and Newcastle, an average worker would not earn enough to cover both full-time nursery costs for one child and average mortgage payments. This means families, particularly those with single parents, could be at risk of falling into debt if they want to continue with their careers past parenthood, or else be forced to stay at home because it is not financially viable.
Mortgage + childcare – how much is left?
| Ranking | City | Average monthly take home salary | Average monthly mortgage payment | Salary left after childcare and mortgage costs paid |
| 1 | London | £2,505 | £3,450 | -£2,328 |
| 2 | Cambridge | £2,282 | £2,355 | -£1,006 |
| 3 | Southampton | £2,025 | £1,803 | -£828 |
| 4 | Bristol | £2,059 | £1,393 | -£476 |
| 5 | Newcastle | £1,757 | £937 | -£115 |
| 6 | Edinburgh | £2,208 | £1,194 | £64 |
| 7 | Nottingham | £1,920 | £872 | £69 |
| 8 | Cardiff | £2,059 | £1,047 | £82 |
| 9 | Plymouth | £1,998 | £877 | £238 |
| 10 | Birmingham | £2,156 | £861 | £291 |
| 11 | Manchester | £2,090 | £889 | £309 |
| 12 | Liverpool | £1,940 | £724 | £356 |
| 13 | Glasgow | £1,958 | £785 | £374 |
And for those who want to expand their family, putting two children into full-time nursery would mean a parent on an average salary would have, at best, £400 a month after paying for childcare bills.
Two children in childcare – the costs
| Ranking | City | Monthly childcare for two children | Wages left after paying for childcare for two children |
| 1 | London | £2,766 | -£261 |
| 2 | Bristol | £2,285 | -£226 |
| 3 | Newcastle | £1,870 | -£112 |
| 4 | Southampton | £2,100 | -£75 |
| 5 | Nottingham | £1,957 | -£36 |
| 6 | Birmingham | £2,009 | £147 |
| 7 | Cardiff | £1,860 | £199 |
| 8 | Liverpool | £1,720 | £220 |
| 9 | Plymouth | £1,768 | £230 |
| 10 | Manchester | £1,785 | £306 |
| 11 | Edinburgh | £1,899 | £308 |
| 12 | Glasgow | £1,598 | £360 |
| 13 | Cambridge | £1,867 | £415 |
Scott Cargill, UK CEO of Admiral Loans, said: “Our research shows the cost of childcare can be a huge burden on new families. Parents who have taken maternity or paternity leave may already be under financial pressure after being on a lower income during their time out of the workplace and may be squeezed even more when the cost of childcare kicks in.
“New parents have a lot of additional costs to consider. For families already on a tight budget, anything that pushes their spending further, such as holidays, Christmas or birthdays, can tempt people into looking for ways to ease the strain.
“Payday and short-term loans that alleviate immediate financial stress can seem like a quick fix, but can make life more difficult in the long term. Parents considering taking out a loan should think carefully about all the options available to them and even whether a loan is right for their financial circumstances. Being clear on the interest rates and ensuring loan repayments are sustainable, is key to ensuring hard-working families don’t fall into a financial trap they can’t escape from.”
Stuart Carmichael, of the Debt Support Trust said: “Many families face a financial dilemma after a child is born and it’s a problem which needs to be addressed. While efforts have been made to make it more affordable for parents to return to work after the birth of a child, for low income families, the financial benefit can be very limited.
“We are concerned that more people could be turning to high interest, short-term loans to bridge financial gaps, which are a temporary solution at best and could lead to additional stress and worry further down the line.
“For those struggling with the costs of raising a family, there is help out there and we would urge people to get in touch with us for advice before they feel they have to turn to desperate measures, which may make the situation worse in the long term.”
Admiral Loans have developed a cost of childcare tool to help families plan ahead: www.admiral.com/childcare
Tips to help ease the stress of the cost of childcare:
- Consider childcare voucher schemes – many employers offer this and it can reduce the cost of childcare, with the bill coming directly out of your salary. The government has also launched tax-free childcare for children under 4.
- Ask family to help with childcare – an increasing number of grandparents are looking after their grandchildren to help ease the burden of childcare costs. They may also be able to get contributions towards their National Insurance.
- Do your research – looking into other childcare options, such as a nanny shared between a group of you, or a childminder, might provide cheaper options. Ultimately it needs to be a place you are comfortable leaving your child, but make sure you factor in all costs so you can make an informed choice.
- If you are concerned about getting charged late pick-up fees from nursery, speak to your employer before returning to work to see if flexible hours would be an option. You have the right, by law, to ask for this.
- Discuss budgets before planning a family so there are no unexpected surprises that you haven’t planned for.
- Avoid taking on extra debt that you can’t keep up repayments on. It can be easy to go for quick fixes, but ultimately, they could put you under more pressure further down the line. Think about whether you can afford the repayments and whether it is the most cost-effective solution.
- Seek advice. Charities such as the Debt Support Trust offer practical solutions to people who are feeling the pinch.