Breaking point: unaffordable childcare traps families in poverty and deepens emotional stress

By Dr Charmele Ayadurai

“I think the working poor is a very real thing... the working poor that are working every hour they can work and they’re still not covering their costs and they’re still not able to have the quality of life that they should be able to have been working full time...”  

[childcare provider, female] 

According to European data hub Statista, the living standards of UK households has declined substantially in the last five years. In January, 57% were found to have experienced a rise in their cost of living compared to the previous month. Rising prices of essential items, utility bills and rent were all cited as main causes. Similarly troubling findings by the Office of National Statistics recently revealed that overall UK household costs rose by an average of 2.6% in March 2025, compared to the year before. 

While difficult for all, the impact of these hikes is felt more keenly in lower income households and communities. Families living on the breadline become trapped when the money coming in stretches less each month. This reality becomes even more difficult when such families have young, pre-school-aged children.  

A new report, co-authored alongside Dr Xiaofei Qi of Durham University’s School of Education, colleagues at Newcastle University, and a collective of local social partners across the North East* has revealed that the cost of living crisis has hit this demographic the hardest. Why? It’s not due to unemployment, wilful or otherwise. Instead, a severe lack of suitable, affordable childcare options is inflicting significant strain on families not only financially, but emotionally and socially too. 

Childcare Should Not Be A Luxury explores formal and informal childcare provision through the lived experiences of 31 families, carers and childcare providers across the North East, a region already experiencing higher than average levels of disadvantage. Through interviews and investigations, the report exposes how a broken system has trapped families in unsustainable circumstances.  

The financial burden  

Costs for even the most basic levels of childcare are often too much for a family to afford, regardless of whether they’re in work or not. The price tag also limits the viability of many employment opportunities for parents, many of whom already have limitations on how they could work, such as only being available during the school day. 

For parents relying on benefits to help make ends meet, flaws in the system often caused more problems than they solved. Turning down unfeasible work scenarios often risked losing their only means of financial support through sanctions. As one respondent explained:  

“Mam didn’t take a job that she was offered… she was offered a cleaning job, expected to go and do a cleaning job at 7:30 in the morning when she had two school-age children and one under three. By herself… She couldn’t pay for the childcare… She got sanctioned. She got her housing benefit took and went into rent arrears and then was potentially going to be evicted.”  

Furthermore, the chicken-and-egg set-up of the current system – that parents must already be in work to access any financial childcare support, yet they need the childcare in place to secure employment in the first place – leaves many families in inescapable limbo.  

For the families who can meet childcare costs, the report found the impact on household budgets to often be devastating. Every family interviewed reported that childcare consumed a substantial portion of their salary, not simply forcing them to cut back on lifestyle choices or luxuries, but instead to make very difficult decisions between “heating and eating”. Many families in work shared that they’d accessed food banks or made severe cutbacks even to essential spending just to afford it.  

There are wider consequences to consider, too. Trapping families in poverty created a ripple-effect of financial hardship, social stagnation and emotional distress that affected not just individual households but entire communities. 

Childcare providers are facing their own crisis. Unavoidably low pay (childcare practitioners often earning less than coffee shop workers) was found to drive high staff turnover and create recruitment barriers. Additionally, the report revealed that while many providers sought to support families by running on-site food banks and offering extended support, this often came at their own expense.  

The mental consequence   

While limited support for families is made available by the government, our report found that navigating complex funding schemes like Childcare Choices and Universal Credit caused excessive anxiety and strain. The families most in need of support – those with language barriers, special educational needs or disabilities to consider, or experiencing separation or addiction recovery – were the ones who suffered the most. 

Beyond financial pressures, our report uncovered a profound impact on wellbeing. Parents juggling limited work around limited care and then navigating life on limited means spoke of a loss of identity as they struggled to find time for themselves beyond work and family stresses. Mothers described experiencing loneliness, isolation and anxiety, and fathers taking on primary caregiver roles due to their partner’s mental health or because they had more flexible employment, often suffered stigma and judgment from society due to outdated gendered expectations. 

Children also faced significant detriments to their development. Being excluded from early childcare settings meant crucial opportunities for social development and school readiness, which have been in decline in the UK in recent years, were missed. These struggles were also felt keenly by childcare providers who commonly shared frustrations of not being able to help further. 

Something needs to change 

Our report highlights an undeniable truth: quality childcare offers far more than the opportunity for parents to return to work. It provides an essential foundation for children’s educational success, a means for parents to build a solid foundation for their families’ wellbeing and stability, and the opportunity for their own professional development. In short, good childcare is the difference between families living and families thriving. 

Our report calls upon government policymakers and societal actors to commit to a complete reinvention of the early years childcare and benefits system, positioning childcare as vital national and regional economic infrastructure.  

To accomplish this, our investigation identified four key actions: 

• Integrate childcare with economic policy: Recognising that childcare is a vital national and regional economic infrastructure will allow government to better address the ‘chicken-egg’ problem of securing work andchildcare, and will help to support a reformation of the benefits system to prioritise workforce participation alongside caring responsibilities. Going further, simplifying overly complex childcare support schemes and eliminating hidden ‘top-up’ costs for consumables like food, nappies and milk can avoid further funding gaps for families. 
• Conduct North East-specific research and assessment: Our report is just one step. Developing a comprehensive understanding of local childcare needs, affordability, accessibility and availability will improve existing local authority assessments, build evidence and ultimately enhance provision for children across the board. A collective effort is needed. Academic research to better represent underrepresented populations can form a core part of this, as well as involving wider societal actors to share their views.   
• Value childcare beyond workforce participation: The economic arguments for childcare are strong, but our report finds that the value of formal childcare for child development and school readiness is often overlooked. Increased formal childcare hours can improve later educational outcomes, which is of particular benefit to disadvantaged children. By framing childcare provision as a contribution to narrowing educational inequality, we can build a thriving future population and workforce.
• Better support the childcare sector as an employer: Addressing core challenges such as a predominantly female workforce, routinely low pay, limited career progression opportunities and the mental toll these roles can take, can help to reduce high staff turnover, improving care availability and quality as a result.  

Childcare policies and programmes should be better organised to support the dual roles of parents as providers and nurturers. Without urgent systemic change, the current childcare crisis will continue perpetuating inequality, limiting opportunities for both parents and children across North East England. For the region to become a true ‘home of opportunity’, accessible, affordable, quality childcare must be recognised as essential infrastructure, not a luxury.