SCOTS are turning to self-employment to get around the problem of rising childcare costs, a survey has found.
A study of new business start-ups by AXA insurance found that 26 per cent are being founded by parents seeking to be more flexible than a nine to five job allows and avoid having to pay for a nursery place of after school club.
Scottish parents have been faced with the steepest increases in childcare costs of any region of UK in recent years, and many find themselves in in-work poverty where the expense of paying for someone to look after their offspring eats up the majority of their salary.
But by running their own businesses they are able to pick and choose their hours to suit and be available when childcare needs arise.
A spokeswoman for AXA said: "The last five years have seen substantial rises in the cost of childcare, particularly in Scotland, and many parents see self-employment as the way forward.
"This way they are free to look after their children themselves while using their own skills to earn money at the on their own terms"
The latest data from the Family and Childcare Trust’s earlier this year found that the cost of an after-school club rose by 8.5 per cent in 2015, while a part-time nursery place for a child aged over two increased to £104.06 per week, a hike of 4.1 per cent.
This is despite a marginal increase in England of 2.1 per cent. Costs in Wales fell by 8.7 per cent.
Statistics produced by the Scottish Government show that there were 26,090 new enterprises founded between March 2014 and March 2015, an increase of 7.8 per cent on the year before.
Colin Borland, of the Federation of Small Business Scotland, said: "This is something which we hear from our members, and childcare is often an issue as the the care of elderly parents.
"For many people employment has changed and we live in a globalised world with a 24-hour culture, and they do not work nine to five jobs anymore.
"Obviously, this does not fit in with childcare arrangements, so a lot of them turn to self-employment to fit their jobs around their lives rather than the other way around."
He added: "It becomes a trade off between the security of regular employment, with holiday and sick pay, pension contributions and so on - and the freedom to pick and choose your hours and fit work around your other commitments."
Aside from the issue of childcare, the AXA study also found that many entrepreneurs are striking out on their own in response to redundancy or long-term unemployment, with 30 per cent saying this was the factor that spurred them on.
Just seven per cent said that getting rich motivated them, while a third were indifferent to the thought of wealth saying it was nice to have rather than their primary goal.
The majority of small business owners said they were motivated by a desire for more time with family.
Darrell Sansom, Managing Director, AXA Business Insurance, said: “Entrepreneurs are coming from a wider diversity of backgrounds than ever before. Mums-at-home, people approaching pensionable age and those living with disabilities are all starting up in greater numbers.
"They’re giving our economy a huge shot in the arm, bringing fresh ideas, creativity and life experience to business. And with the majority telling us they are a success, even at an early stage, we can certainly see the new style of doing business works.”
Scots are entitled to 600 hours free early learning and childcare for 3 and 4 year olds, while the Scottish Government has committed £329m over two years to expand childcare. It previously announced plans to almost double funded hours to 1,140 by the end of the next parliament.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here