(Bloomberg) -- The UK government's plan to reduce the cost of child care fails to support the country's poorest parents, new analysis shows.
Families on the lowest 30% of incomes will see almost no direct benefits from the new entitlement, according to a report from the Institute for Fiscal Studies published Tuesday.
Chancellor of the Exchequer Jeremy Hunt announced measures to make child care more affordable for working parents in this year’s Spring Budget. As part of the changes, eligible parents will receive up to 30 hours of subsidized child care by September 2025 for children who are aged between nine months and five years old.
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The expanded scheme's focus on employment as part of a broader back-to-work drive means affluent parents are better placed to take advantage, the London-based think tank said. This threatens to cause further a further divide in child development based on income level.
Existing offers which did target low-income families have also been scaled back as changes to government benefits have reduced eligibility. A scheme which seven years ago supported the 40% most disadvantaged two-year olds in the country now covers less than one-quarter of the cohort.
The UK is one of the most expensive countries in the OECD for early-years care, compounding broader cost pressures on households as the country weathers an ongoing cost-of-living crisis.
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