Cost of nannies rising by 11%

A new survey shows higher than inflation rises in nanny salaries amid increasing demand.

Nanny with three children


Salaries for full-time nannies have increased by 11% in the past year, according to figures from Nannytax, which says demand is being driven by childcare shortages elsewhere.

Nannytax, a payroll provider and nanny employment company, says the average gross salary in the UK has risen to £35,984 per year or £2,999 per month. However, nannies in the home counties and Greater London have seen bigger rises of 14%, with gross salaries increasing to £40,300, or £3,358 per month. It adds that Buckinghamshire nannies are earning 8% more than nannies in Essex. Meanwhile, families who live in London can expect to pay £42,848 per year, or £3,571 per month, a rise of 8% on the previous tax year.

The figures, based on the company’s internal payroll records for the tax year 2022/23, are calculated for live-out nannies working full time, 50 hours per week, before tax.

Nannytax says one reason for the increases is higher demand as other childcare providers close.

In a Nannytax survey looking at the reasons why parents employ nannies, 9% said their decision to do so was influenced by the fact they couldn’t secure nursery places for their children. More than half (57%) said they needed wraparound care to cover school runs, teatime or bathtime, 50% worked long hours and 18% worked unusual shift patterns.

Making nannies more affordable

Kirsty Wild, a nanny employment expert at Nannytax, says: “There are all sorts of reasons families turn to nannies and, now, childcare placement shortages are pushing up demand and salaries. Although full-time nannies are expensive, we know most families (55%) are only using nannies part time, to cover childcare gaps and enable them to carry on working.

“We think the Government could be doing far more to help families cover nanny costs and help more women return to work. The Chancellor announced in March that every child from nine months old in an eligible working family would be entitled to 30 hours of free childcare by September 2025, and yet this doesn’t include childcare offered by nannies. That’s nonsensical given the clear need for care outside of nurseries’ and childminders’ operating hours. We’d like to see the Government make 30 hours free childcare more flexible by including nannies. A Government top up would help more hardworking families afford nannies to plug childcare gaps.”

In addition to part-time nannies, Nannytax says parents of multiple children can find it more affordable to pay for nannies than several childcare places. With nannies the cost of caring for two or three children is typically no higher than caring for one.

Another money-saving method of using nannies is to opt for nanny shares, where two or more families use the same nanny, although each employer/family must pay the nanny at least minimum wage.

Ofsted-registered nannies can also be paid via the Tax-Free Childcare scheme. Wild explains: “This Government scheme can be used to pay approved nannies up to £2,000 per child per year, or more for children with disabilities, but it’s widely underused. In a recent Nannytax poll of parents who employ nannies, 15% said they’d never even heard of it. We urge all eligible parents to take advantage and cut their childcare costs.”

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