Childcare costs in the UK: is It worth returning to work?

Having children is undoubtedly one of life's most rewarding experiences, but there is often a number of worries which come alongside the magical moment of finding out you're expecting. When I was pregnant with my first child just under three years ago, I worried about what I ate, the vitamins I was taking and whether I would be able to continue on the career path I had set myself.

There was a crumbling realisation that my career would need to stall considerably for at least 9 months, maybe longer. Additionally, we knew we needed to start saving now, we knew having children came with a price tag, the pram, the car seat, the wardrobe; but in all honesty, I wasn't quite prepared for how significant the childcare costs would be. We have a healthy salary between us, but when the startling understanding hit that our monthly childcare fees would be 4 figures for a full-time place, I started to question whether returning to work was worth it, both financially and emotionally.

In the UK, the cost of childcare can be prohibitively expensive, with some families spending up to a third of their income on childcare. The most recent Pregnant Then Screwed national report states that 3 in 4 mothers (76 per cent) who pay for childcare say it no longer makes financial sense for them to work.

If we look at what it takes to make sure childcare is a viable financial option, it is first important to consider the amount that you need to earn. As a general rule, you should aim to earn at least twice the cost of childcare in order to make it financially viable. Therefore, to cover the average cost of a full-time nursery place at £12,600, you should look to be earning at least £29,500, £2,100 more than the average salary in the UK. When you consider most families are made up of two children, you can see why there are an increasing number of mothers who are not returning to the workforce.

In addition to the direct costs of having children, there are also indirect costs that are often overlooked. The impact having children has on a woman's career, and therefore lifetime earnings can be substantial. According to a report by the Institute for Fiscal Studies, women who take a career break to have children typically earn less than their peers who do not take a break.

The report found that women who take a year out of work can expect to earn 30 per cent less over their lifetime, while those who take two years out can expect to earn 40 per cent less. While this may be a necessary choice for some families, this represents a significant financial cost that can have a long-lasting impact on a woman's financial security and independence.

With childcare being such an important factor in not only how much it costs to raise a child, but also whether women choose to return to work, it's important to consider ways in which you as a family can best manage this significant cost.

Below are some of my top tips:

1. Find the right government support: There are multiple schemes that the government offer to help you reduce your childcare bill, from a workplace nursery salary sacrifice arrangement which can save you between 32-59 per cent of your fees, to the tax-free childcare scheme for working parents, which can help to cover up £2,000 per child per year.
2. Consider flexible working arrangements: Many employers in the UK offer flexible working arrangements, such as part-time, condensed working or remote work, which can help to reduce the need or amount of childcare. By working from home or reducing working hours, parents can save money on childcare costs and spend more time with their children.
3. Look for parent-friendly workplaces: While high-quality childcare can be expensive, there are many forward-thinking companies that are looking to support their parent workforce. For example, Sony Music has recently introduced a new policy that provides employees with funding towards the cost of childcare.

With women's career ambitions continuing to rise, we are in need of a significant shift in the support mechanisms provided to ensure women can pursue their careers whilst also caring for their families. Thankfully there are a number of organisations putting pressure on policymakers and employers to continue to address the significant barriers facing working mothers. By government and employers working together, we can help to ensure that having children remains accessible and families can better manage the financial burden of childcare whilst also pursuing their careers and personal goals.

By Hannah Hardman

Hannah is co-founder and CMO at The Herde, a business dedicated to helping other working mums find balance and success through more affordable childcare.

With two children under two and a dog named Rosie, she is a true advocate for the power of hard work and passionate about all women having a choice in their quest for a career and a family. Her passion for empowering others is evident in her work, and she strives to inspire those around her to reach for their full potential.