Childcare costs and Universal Credit: awareness, affordability and the challenge of an embedded system

Abstract

Helping parents meet the cost of childcare is an important policy objective in the UK and there are various financial subsidies available. For low-income working parents, this support is increasingly provided through Universal Credit, the main means-tested benefit for working-age people in the UK. This article draws on qualitative interviews with parents on Universal Credit and explores issues of awareness, affordability, administration and the consequences of embedding childcare costs into a monthly-based means-tested system. The conclusions reflect on the implications for the Universal Credit goals of supporting employment, of simplification of the system, and of increasing personal responsibility.