Parents on low incomes are being pushed out of work because they can't afford the costs of childcare, a survey by Save the Children and Daycare Trust has found.
A quarter of the 4,359 parents surveyed by the charities said they had fallen into debt as a result of the cost of childcare, while 80 per cent of those earning £12,000 or less said they were no better off working once they had paid childcare costs.
The survey also found one quarter of those on low incomes had given up work and a third had turned down a job because they could not afford to pay for childcare.
The charities said British parents are now spending more than anywhere else in the world on childcare, with costs eating up a third of incomes.
It compared the rate to Sweden, where no family pays more than five per cent of gross income on childcare, according to the OECD.
A recent survey of family finances by insurer Aviva highlighted how finely-balanced household budgets are. The report found that the average cost of full-time childcare is £385 a month, but this rises to £729 for children under two.
The cut to the working tax credit has also had an impact, with four in ten are considering giving up work because they will not earn enough for childcare. Liam Byrne, Shadow Work and Pensions Secretary, said that this demonstrates the coalition's 'unthinking attack' on childcare. He commented:
“A year and a half after the recession, with unemployment still rising, this is yet more evidence that the Government are simply being far too casual about getting people into work".
Sally Copley, Save the Children's head of poverty, said the recent cut to the working tax credit has made the situation in the UK worse.
"The government must give the poorest parents a chance to work their way above the poverty line. We know that the best way out of child poverty is to help parents into work."
However a government spokesperson defended the coalition’s record to the Huffington Post UK, saying: “The cost of childcare is one of the most important factors for parents when considering work, which is why the childcare element of the working tax credit remains a generous offer and - as part of the planned Universal Credit - we are committed to maintaining investment in childcare costs. We are working hard to get this right ahead of the final reform.
“The coalition government has also extended free early education to all three and four-year-olds to 15 hours a week, and is committed to extend this to the most disadvantaged two year olds from 2013.”