More than half of households are relying on credit cards and overdrafts to cover childcare costs during the holidays, Advice NI has revealed as costs continue to increase.
A recent survey conducted by the Employers for Childcare says that more than half of families in the north resorted to credit cards, loans or savings to cover childcare expenses last year.
It also revealed that at least 1 in 5 parents relied on an overdraft to pay their childcare bill, while more than 1 in 10 used a credit card where the balance was not paid off in full the following month.
With the average weekly cost of a full-time childcare place currently 14% more expensive than last year, Advice NI have called for urgent action to mitigate the financial risk to households facing debt.
Education Minister, Paul Givan, will this week be seeking Executive approval for plans to make major changes to nursery schools and childcare provision, including a standardisation of nursey places allowing children to receive 22.5 hours a week.
But the £25m set aside is only 6% of the £400m needed to fully fund the childcare and early learning strategy.
Sinead Campbell, Head of Money, Debt, and Quality at Advice NI, said that calls for support peak during the school holidays.
She added: “It’s alarming that 60 per cent of people are relying on credit and savings to pay for their childcare, a huge increase from 41% in 2021. Debt due to poor childcare reform has a lasting impact on families for many years and can lead to a cycle of debt some many never escape.
“In addition to those with young non-school aged children struggling to pay high childcare costs, we are finding the school holiday period is a particularly challenging time for working parents, with many already struggling with the cost-of-living crisis.
“We are also concerned that many working families migrating to Universal Credit from Tax Credits, may struggle to pay childcare costs and find themselves getting credit to absorb the cost until they receive their first benefit payment.”
Ms Campbell said that it was no longer just single parents or low-income families struggling, adding that high earners are increasingly struggling to keep up with costs and falling into a cycle of debt.
“Action is needed now including short-term and long-term interventions to provide a lifeline for those struggling whilst trying to do the best for their children,” she said.
