Nanny salaries rise as post-pandemic working patterns spur demand

Nanny salaries in some parts of the UK have seen their biggest increase in five years, with demand driven partly by the Covid pandemic and childcare worker shortages, according to an annual index.

Nannies working outside London and its surrounding commuter counties earned an average annual salary of £32,552 in the 2021/22 financial year, or £12.52 per hour, according to figures published today by Nannytax. This was a rise of 13% on the previous financial year, and the biggest rise in five years.

A nanny working in London earned an average annual salary of £39,806, or £15.31 per hour, which was an increase of 8% on the year. All figures in the index are calculated on the basis of nannies working 50 hours per week.

The Covid pandemic and its aftermath have spurred a rising demand for nannies, which in turn pushes up their pay, according to Kirsty Wild at Nannytax, the UK’s largest nanny payroll company. 

“Demand initially rose during the first lockdown, when nurseries were forced to close their doors and nannies were the only childcare providers permitted to continue working,” Wild said in a statement. “But that turned out to be no flash in the pan.”

The particularly large rise in nanny salaries outside London and the Home Counties could be due to families moving out of the capital during the pandemic, as well as the fact that finding childcare in smaller towns and rural areas can be harder, Wild added.

For parents who continue to work flexibly or remotely as we emerge from the pandemic, nannies can often be more flexible with their working hours than nurseries or childminders. Nannytax’s index found an increase in demand for part-time nannies and nanny-shares, with 61% of nannies now working part-time, up from 53% in the previous financial year.

The Brexit effect

Some nanny agencies are reporting a shortage of nannies to meet this demand, which in turn pushes salaries up further. Brexit has also stopped EU nannies and au pairs coming to the UK as freely as previously. 

“[There is a] rising demand for in-home childcare, alongside a candidate shortage compounded by Brexit,” Frankie Grey, founder of the nanny agency Harmony at Home, said in a statement. “With the quantity of jobs far exceeding the number of applicants, we are the busiest that we have ever been.”

From hotels to hospitals, employers in several sectors are grappling with the UK’s worker shortage. Many employers are having to grant pay rises or one-off “cost of living” bonuses to help retain staff.

Nannytax’s salary index is based on almost 8,000 of the company’s internal payroll records for 2021/22. It does not include “live-in” nannies, who typically charge less because their rent and food costs are often covered by the family they work for.

Nurseries struggling to balance the books

Meanwhile, many nurseries are struggling to break even, as they emerge from a pandemic that put them on the frontline with low pay and little state support. Even before the Covid crisis began, nurseries had been stretched to their limits in recent years by a lack of government funding.

At least 232 nurseries in England closed during the 2020/21 financial year, a 35% increase on the previous year, according to a report last year by the National Day Nurseries Association. The country’s most deprived areas, where parents and children often need support the most, saw the highest numbers of closures.

Nurseries have repeatedly called for more government funding so they can balance their books, pay staff a decent wage, and charge parents affordable fees. While more affluent families may now be turning to nannies, this is unlikely to be an option for parents on low incomes. Children from disadvantaged backgrounds were the most likely to drop out of nursery during the height of the pandemic, and there are concerns that many will not return to pre-school settings at all, according to research published last month.

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* A nanny is someone who is employed by a family to care for their children, and they do this in the family’s home. A childminder is a self-employed person who cares for children in a setting that they choose (usually the childminder’s home). Nannies and childminders have to follow different regulations for their minimum qualifications and other issues. You can find out more here.

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