As my colleague Shelley explained in her blog yesterday (Inflation now at 2% target, 14th January 2014) , the latest price inflation figures represent an average.
Our individual experience of price inflation is likely to differ depending on the actual goods and services we consume.
One service where price inflation is a little (well, actually a lot!) higher than the government target of 2% is childcare.
Research published recently by The Guardian shows the cost of childcare in Britain has soared by 19% over the past year. This was according to research carried out by a childcare search website.
In many cases, the rapidly rising cost of childcare means many parents would prefer to work. My colleague Andrew wrote recently about this childcare and career dilemma.
Within this average childcare inflation figure of 9% is hidden a big hike in the cost of nannies, up 25% over the past year to an average of £8.75 an hour.
The Guardian also reported figures from the Family and Childcare Trust. In their survey last year, they found the cost of childcare had risen by 77% over the past decade.
These rising childcare costs often result in people ending up in ‘pay neutral’ employment; where childcare and commuting costs account for any improvement in net earnings.
For parents with school age children, the cost of childcare is an important consideration when constructing and maintaining a robust Financial Plan.
Understanding how those costs might increase in the future is also important, to ensure your chosen childcare options remain affordable for as long as you want.
