Inflation Costs Cause Childcare Fees to Spike

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Inflation Costs Cause Childcare Fees to Spike

Research by the Early Years Alliances suggests the majority of childcare settings will be increasing their fees in the coming year in order to account for rising costs. With inflation currently running at above 10%, pushed up by factors relating to the war in Ukraine, Brexit, supply chain issues and other economic factors, many settings are finding their outgoings rising significantly. The government’s increase of the minimum wage is also having a significant impact on the sector’s costs. 

Childcare running costs are already high, with landlords increasing rents, and difficulties recruiting meaning many providers are relying on expensive locum staff. Moreover, providers offering the 30 Hours scheme are legally prevented from charging top up fees. This may increase the rate of change for private fees, as well as fees for optional extras. 

While parents are struggling too, most are expecting that childcare prices will rise along with everything else. However, providers must still strike the difficult balance between ensuring they can make ends meet and not driving away their customers. This situation is driving further calls for more financial assistance from the government. It is likely that parents facing increased fees will also be piling pressure on politicians to do something about the increasingly unsustainable situation. 

Increasing fees can have other knock on effects too. Morton Michel policy holders in any sector who have business interruption insurance should contact us if you expect your turnover to increase as a result. This is to ensure that you do not find yourself becoming underinsured.