The high cost of childcare means that thousands of mothers are effectively paying to return to work after having children, according to the IPPR, which is calling for universal pre-school to start at the end of parental leave.
The Institute for Public Policy Research (IPPR) said that ‘a complex, patchy and costly’ childcare system and its interaction with the universal credit taper and income taxes was leading to an ‘effective marginal tax rate’ of more than 100 per cent for low-income families.
Low earners face 'staggeringly high' effective tax rates of up to 130 per cent if they work more than 27 hours a week, it said.
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