Childcare offers a safe and fun environment where children can socialise, learn and play, but costs can make up a significant proportion of many working parents’ outgoings. But how much you pay can vary considerably depending on where you live.
The Cost of Childcare Report from the team at money.co.uk takes a seed list of OECD* countries to discover the countries around the world with the most and least affordable childcare - and where the UK ranks.
If you're looking to spread the cost of childcare, you could consider taking out a loan. Compare loans to help you find a deal that best suits your needs.
The report identifies what percentage of parents' monthly and annual income will be spent on childcare for children aged 0-2, who may not be entitled to any government or additional funding in their home nation, as is the case for the majority of parents in the United Kingdom.
Finding good quality childcare can be a difficult task, but childcare is an important element for many working parents. Our report looks at which countries' parents are spending the largest amount of their take-home pay on childcare costs.
|Country||Monthly Cost of Childcare (£)||Average Monthly Salary (one person)||% of earnings spent on childcare (single parent||Average Monthly Salary (two parents)||% of earnings spent on childcare (two parents)|
Parents in Chile are spending the largest amount of their monthly salary on childcare (58.5%). With single parents in the South American nation spending well over half of the average monthly income on full-time care, and two parent households spending just under a third of their earnings.
In Chile, single parents earn on average £5,067.12 annually. Comparing this with the monthly and annual cost of childcare at £247.50 and £2,965.20 (five days per week) means that single parents in Chile are spending a whopping 58.52% of their total earnings on full-time childcare.
In comparison, a two parent household can expect to pay 29.26% of their combined earnings on childcare costs.
|Country||Monthly cost (3 days per week)||Average Monthly Salary (one person)||% of earnings spent on childcare (single parent||Average Monthly Salary (two parents)||% of earnings spent on childcare (two parents)|
The Dutch follow closely behind in second place, with single parents in the Netherlands also spending over half the average income on full-time childcare.
With an average monthly salary of £2,203.41, equating to £26,440.92 per year single parents are spending 56.73% of the average earnings on full-time childcare (five days a week) at an average monthly cost of £1,249.93.
Two parent households in the nation can expect to spend 28.36% of their combined average income of £4,406.82 on childcare.
The UK takes fifth place in the report, with single parents in the country spending over half of their average income on full-time childcare.
The monthly cost of full-time childcare in the UK comes to £936.41, equating £11,236.92 per year, comparing this to the average yearly income in the UK (£23,583.48), single parents are spending 47.65% of their average earnings on full-time childcare.
This figure is halved for two-parent households with an average yearly income of £47,166.96 resulting in 23.82% of their income being spent on childcare.
Childcare prices in the UK alone have increased by 4% over the past year due to the impact of COVID-19 on businesses, therefore parents are being faced with rising costs.
Childcare is often the only option for many working parents, but it is also a great place for children to grow and learn, preparing them for socialising at school in the future.
With childcare in such high demand, costs have understandably followed suit, which is why the team at money.co.uk have determined the countries where childcare is the most and least affordable.
|Country||Cost of Childcare (One day)||Weekly cost of childcare||Monthly Cost of Childcare (£)||Annual Cost of Childcare|
The quality of childcare in Sweden is among the best in the world, with long, government-funded paid parental leave. Working parents are entitled to 480 days of paid parental leave, with very few countries around the world offering even half as many days.
It therefore comes as no surprise that Sweden leads the way as the most affordable country for childcare. Working parents in Sweden are supported with a low-cost daycare rate of £5.75 a day, and the latest OECD data shows almost half (46.3%) of children aged 2 and under attend daycare.
Sending your child to daycare full time in Sweden amounts to a weekly cost of just £28.75, and a monthly cost of £114.99. Over the year, Swedish parents pay just £1,379.88 for childcare for under-two.
Colombia has made significant and positive progress in developing its early childhood education and care (ECEC) provision, moving towards a more formalised system in recent years.
As a result, participation rates in childcare have surged. Between 2007 and 2013, enrolment in early childhood education services among 0-5 year-olds in Colombia more than doubled, from 16% to 41%.
Colombia, where almost a third (30.9%) of children aged 0-2 are in childcare, closely follows as the second most affordable country for daycare in the report. If a busy work schedule requires care for your child five days a week, then Colombian parents will pay an average daily cost of just £5.89. Over the year this equates to £1,414.32 - 12% less than parents pay for full-time childcare in Mexico (£1,594.32).
Although childcare centres run by the government do exist in Mexico, private childcare is much more common and considerably easier to find, which could be a factor in why Government enrollment rates in Mexico are considerably low.
However, despite only four in every hundred children (4%) aged 0-2 in childcare, Mexico emerges as the third cheapest country for the service, at just £6.64 a day. Full time childcare therefore amounts to £33.22 per week, £132.86 a month, and just £1,594.32 over the year.
Mexican parents only requiring childcare services two or three days per week will pay less than £1,000 over the course of an entire year (£956.59 and £637.73 respectively) in fees.
A report by the United Nations Children’s Fund (UNICEF) found that Switzerland is one of the most expensive countries in the world for childcare, and has also been ranked low for its flexibility regarding parental leave.
Despite being one of the priciest countries around the world for childcare, almost two fifths (38%) of Swiss children under the age of 2 attend daycare, so how much are their parents paying on average?
The average daily cost of childcare for the Swiss is an eye-watering £92.50, with full-time care setting parents back £461.02 per week, £1,844.08 a month, and £22,128.96 annually - slightly less than the average UK salary.
Swiss parents able to send kids to childcare three days a week will still face an annual bill of 13,277.38, with those reducing to just two days still tackling a shockingly high yearly amount of £8,851.58.
The Netherlands, already one of the most expensive places for childcare, will see costs rise between 2.3% and 2.9% in 2022, as a result of higher wages according to organisations BK and BMK.
However, despite being second place on the list as the most expensive country to send your child to daycare, almost two thirds (65.5%) of children (aged 0-2 years old) are currently enrolled in childcare in the Netherlands.
The daily cost of Dutch daycare starts at £62.50, amounting to £312.48 per week, a monthly cost of £1,249.93, and a staggering annual bill of £14,999.16.
Parents using childcare facilities three times a week will spend £8,999.50 in a year, while those relying on it just twice a week can still expect to pay £5,999.66.
Despite the UK being the fifth most expensive country for childcare costs, 45.1% of 0-2 year olds are enrolled into a daycare programme.
The daily cost of daycare in the UK starts at £46.82, amounting to £234.10 per week, a monthly cost of £936.41 and a yearly sum of £11,236.92 for full-time childcare.
Parents using childcare facilities three times a week will spend £6,742.15 in a year, while those relying on it just twice a week can expect to pay £4,494.77 - a difference of £2,247.38.
Having a baby is one the great joys of life, but it also comes with a lot of stress for new parents. It is only normal for the majority of parents to be concerned about the cost of childcare and the implications of flexible working from the very instant they find out they are pregnant.
There’s no denying that childcare is one of the most costly aspects of adding to your family. It takes up a significant portion of household income if you’re not lucky enough to have any local family or friends willing to help you out during those initial years. Here are some ways you can get help:
30 hours free childcare
Parents of three and four-year-olds can apply for 30 hours of free childcare a week. To qualify you must work at least 16 hours a week at the national living or minimum wage and earn less than £100,000 a year
For children under 20, some families can get help with childcare costs
Tax free childcare
Available to working families and the self-employed, for every £8 you put in the government will add an extra £2. Here is more information on how the Tax Free Childcare scheme works.
It’s a good idea to revisit your household spending at regular intervals, especially if you are planning on starting a family in the future. You will need to consider how much you’re able to save up during pregnancy, and then revise your budget again when the time comes to take parental leave.
If you're an employee, you should be entitled to statutory maternity, paternity or parental leave. Your company might also offer additional payment or benefits to help top up your monthly income. Add these payments to any savings that could help cover your necessary costs, then divide this amount by the number of months you plan to take off.
Keep in mind that day-to-day expenses will likely change when you are not at work. For example, you will save money on not travelling to and from work on a daily basis, but household gas and electricity bills are likely to increase due to spending more time indoors.
If both you and your partner plan to return to work following parental leave, you will need to consider childcare costs. Unless you are able to take advantage of help from friends, grandparents, or other family members, you will need to decide whether to send your child to a childminder or a daycare facility such as a nursery.
Luckily there is help for parents to manage these costs, including free childcare (for children aged between three and four) for a set amount of hours each week, tax relief on childcare you pay for, and tax credits.
If both parents are wanting to focus on their careers, but you also don’t want to send your child to daycare on a full-time basis, getting creative with work schedules could be an option. Asking your place of employment about flexible working hours is a great option for making sure one parent is always at home with the child. For example, one parent may work an early morning shift while the other parent works a late shift. This might not work for your family’s situation or jobs, especially in the long term, but it’s a workable short-term option if your schedules can be adapted.
Working from home is another option. Since the beginning of the pandemic, working from home and hybrid working have become more popular, especially among parents who have benefitted from a more balanced home/work life. However, it still may be necessary to obtain some sort of childcare, depending on the demands of the job. Hiring a part-time caregiver or asking a family member to take the child for a couple of hours during the day may be a good option in this situation.
Working Tax Credit is money provided to boost the income of working people who are on a low income.
Universal Credit is a single monthly payment for people in or out of work, which merges together some of the benefits and tax credits that parents might already be receiving.
Universal Credit payments can include an amount to help with the costs of looking after children.
Tax-Free Childcare is a government scheme available to working parents with children under 12 years old, or under 17 years old with a disability.
Eligible parents can get up to £2,000 per child per year, or £4,000 per disabled child per year, to spend on qualifying childcare.
Tax-Free Childcare doesn’t have to be used solely on daily childcare costs, it can also cover the cost of:
After school clubs
School holiday activities
*The Organisation for Economic Co-operation and Development is an intergovernmental economic organisation with 38 member countries, founded in 1961 to stimulate economic progress and world trade.
The Cost of Childcare Report by the personal finance experts at money.co.uk discovers which countries are the most affordable for childcare costs.
Taking a seed list of OECD countries, the report discovers what percentage of parents' monthly and annual income will be spent on childcare (aged 0-2 who aren't entitled to any government or additional funding), by using the following metrics:
Average monthly income (single and two parent household) - sourced from Numbeo
Average Yearly Income (single and two parent household) - calculated using the monthly income metric and multiplying by 12
Average cost for a day - calculated by using the monthly childcare data from numbeo and working out how much for one day of childcare per week
Cost for a week - Calculated by using the average cost per day and multiplying by 5 to reveal the cost per week of childcare in each country
Cost for a month - Sourced from Numbeo (data is for five days of childcare per week and gives the average cost for a month per country)
Yearly Cost - calculated using the cost per month and multiplying by 12 to reveal the average annual cost of childcare in each country
Percentage of earnings spent on childcare (single and two parent household - calculated by dividing the monthly cost of childcare by the average monthly income in each country to determine which countries spend the highest percent of their wage on childcare
Cost for three days of childcare per week/month/year - calculated by taking the cost for a day figure and multiplying by three to work out the cost per week. We then multiplied this figure by four to calculate the monthly cost. Lastly, we used the monthly cost of childcare figure to work out the annual cost of childcare if children attend three days per week.
Cost for two days of childcare per week/month/year - calculated by taking the cost for a day figure and multiplying by two to work out the cost per week. We then multiplied this figure by four to calculate the monthly cost. Lastly, we used the monthly cost of childcare figure to work out the annual cost of childcare if children attend two days per week.
Enrolment rates in early childhood education and care services, 0- to 2-year-olds - most recently reported data sourced from OECD family database
Currency Conversions correct as of 04/11/2021
Data correct as of 04/11/2021
Salman is our personal finance editor with over 10 years’ experience as a journalist. He has previously written for Finder and regularly provides his expert view on financial and consumer spending issues for local and national press such as The Express, Travel Daily, and The Daily Star.