The rising cost of childcare is stopping people from getting the mortgages that they want, while working parents are having to rely on relatives to help with the financial burden.
Grandparents are saving parents £16 billion in childcare costs, a study has found. The number of grandparent childminders has risen nearly 50 per cent in three years, with more than nine million spending an average of eight hours a week looking after their grandchildren. Another 2.7 million provide free care for more than 11 hours a week. This is saving the average family £1,786 per child each year, according to Ageas, an insurer.
The figures show a big increase in family help from 2009, when six million grandparents provided childcare for an average of five hours a week, saving families £860 a year.
Many parents do not realise that mortgage lenders take childcare costs into account when deciding how much to lend. Several hundred pounds a month on childminders can cut tens of thousands from how much you can borrow. Aaron Strutt, a mortgage broker from Trinity Financial, gives the example of a couple with two children earning £75,000 between them, who would be able to get £356,250 without childcare and credit card repayments. Factoring in the £450 a month they spend on babyminding and small monthly card commitments means lenders will only let them borrow £287,695 — £68,000 less.
From next year working grandparents will be allowed to share in the 52 weeks of parental leave available to mothers and fathers.
Under plans put forward in 2015 by George Osborne, grandparents will be able to claim statutory shared parental pay from their employers — either 90 per cent of their weekly earnings or £139.58, whichever is lower.
Yet more needs to be done to ease the burden of childcare costs on families, says Andy Watson, the chief executive of Ageas. “The government needs to go further by looking at either subsidising the cost for those baby boomers now doing their best to provide childcare, or providing more financial support for families to get regular professional childcare,” he says.
Some grandparents are downsizing to homes closer to their children so they can help out. Richard Jackson, 67, and his wife, Judith, 66, are saving their two children £2,000 a year in childcare after selling their five-bedroom detached house and buying a three-bedroom home at Cane Hill Park, a development in Coulsdon, Surrey.
They had been in their former home for 32 years, but by moving nearer they can look after their grandchildren twice a week.
“Our previous home used to back on to the train line, and was located near a noisy road, so wasn’t particularly child-friendly. It also required a lot of upkeep and the heating bills were getting expensive,” says Mr Jackson.