Expert warns of ‘hidden crisis’ as rising childcare costs push 1 in 6 parents to credit cards

New figures reveal parents are now paying an average of £1,076 per child for six weeks of summer holiday childcare – a 4% rise on last year.

This cost comes at a time when many families are already relying on credit to manage day-to-day expenses. Recent data shows that one in six parents (16%) with children under 18 have used a credit card to pay for essential household bills within the past three months 1. The added expense of holiday childcare highlights how stretched some household budgets already are.

Our founder at Updraft explains how the overlap between rising childcare costs and increased reliance on short-term credit points to a broader issue: families are navigating structural financial pressure, and smarter forms of support are needed to help reduce dependency on high-interest borrowing.

Credit use rising among UK parents

The latest research reveals the extent of financial strain facing parents:

• 23% of parents with at least one child under 18 have used credit, a loan or overdraft to get through to payday – almost double the proportion of UK adults overall (12%).

• 33% of parents have no savings to fall back on, compared to 23% of UK adults.

• 16% of parents have used a credit card to cover essential household bills in the last three months, compared to 10% of all UK adults.

Parents are using credit cards to plug the gap

Aseem Munshi, Our founder of Updraft, experts in helping people pay off credit card debt and manage consumer credit, comments:

“The fact that families are facing over £1,000 in childcare costs this summer is deeply concerning on its own. But what really stands out is that many parents are already turning to credit cards just to cover the basics like food, energy, and rent, before childcare even comes into the picture.”

“We’re seeing more and more families having to prioritise their children’s immediate needs, even if that means putting essentials on a credit card and dealing with the interest later. Some families turn to credit cards when other options aren’t available. While this can help cover urgent costs, it’s worth remembering that interest can add up quickly if balances aren’t paid off in full.”

“Rising childcare costs and increased reliance on credit cards highlight a growing financial strain on families.”

Support that’s designed to help

If you’re juggling credit cards, overdrafts or short term loans, it can be hard to keep track. Some people look at combining their borrowing into a single monthly payment to make things feel more manageable, but it’s important to consider the long term impact, as this approach can extend the term and increase the total amount you repay.

Updraft offers tools that could help you take control of your borrowing. For free guidance on managing debt, you can also visit MoneyHelper.

It’s not a quick fix, but it can be part of the solution for those looking to take back control.

Find out more about managing credit and borrowing at updraft.com

About Updraft:
Updraft is an FCA authorised lender. We provide personal loans to try and help customers manage existing credit commitments, subject to credit and affordability checks.