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Pressures of Brexit see rise in UK nanny childcare costs

Research conducted by Nannytax finds the average cost of hiring a nanny has risen by 8% since 2017/18 with the highest rise outside of London seen in the South East and the lowest in the North West. The annual gross salary for Live-out nannies in the West Midlands has risen by 8% since last year from £26,945 to £29,094 and in the East Midlands it has risen by 12% since last year from £25,019 to £28,028.

Nannies represent a sizeable, well-trained and well-paid portion of the UK childcare workforce providing individual and quality care. The challenging economic and political climate is affecting employment in many sectors and the implications around Brexit have led to a skills shortage in the childcare sector with the reduction of EU workers pushing up employment costs along with the rise of the minimum wage. There were 10,000 providers on 31 December 2018, down by 600 since 31 August 2018. Although the numbers of home childcarers have fluctuated over time, they are now 12% lower than they were on 31 August 2015. (Source:Ofsted).   

Nannytax, the UK market leader in nanny payroll services, has released its annual wages report, the Nannytax Nanny Salary Index 2018/19 which has revealed an overall increase in salaries for nannies across the country, with the average gross salary for Live-out nannies in London and the rest of the UK increasing by 8%. Similarly, the average salary for Live-in nannies has increased by 9% in London and the rest of the UK has seen an 8% increase.

Key findings

  • Live-out nannies in London earn an average gross wage of £13.35 per hour, an 8.1% increase from 2017. This is the highest paying region for live-out nannies across the country.
  • Live-out nannies working in the rest of the UK earn an average gross of £10.96 per hour, an increase of 8.4% from our 2017 report.
  • Live-in nannies, working outside of London, earn an average gross figure £8.32, a 7.7% increase from 2017.
  • Outside of London, the South East of England is the highest paid area for Live-in nannies, who earn an average gross wage of £9.76 per hour, followed by East Midlands at £9.74 per hour.  The North West is the lowest with an average gross wage of £8.42 per hour, followed by the West Midlands at £8.90 per hour.
  • Outside of London, the South East is also the highest paid area for Live-out nannies, who earn an average gross wage of £12.45 per hour, followed by the East of England at £11.67 per hour and the South West at £11.51 per hour. The lowest is in the North West at £10.11 per hour, followed by the North East at £10.26 per hour.
  • Live-out nannies salaries have risen significantly across most regions since 2017/18 with Scotland and the South East both seeing a rise of 17%. (South East salaries rising from £27,762 to £32,370 and Scotland £25,303 to £29,505). The only exception is in the North West where salaries have reduced by 9% (£29,790 dropping to £26,296).

Kirsty Wild, Head of Sales and Marketing at Nannytax said: “With childcare costs at an all-time high choosing a nanny is not the cheapest option for working parents but hiring a qualified professional brings many rewards and individual care. With this expertise comes higher costs and salaries have also risen amid a Brexit fueled skills shortage. This rise in wages is of course good news for those nannies in employment but is another financial burden for working parents during a time of economic uncertainty. It is promising to see a consistent rise in salaries also the UK except for in the North West which saw a decrease in wages of 9% since last year’s report.”

Nannytax has launched the 2018/19 edition of its annual wages report, the Nannytax Nanny Salary Index. A guide that reveals the average gross salaries for Live-in and Live-out nannies across the UK. This exclusive data has been used to update the renowned nanny salary map, as well as the 5-year comparison tracker.

Background

In 2008, Nannytax released its first annual wages report, a resource which has proven to be invaluable for nanny employers, nannies and nanny agencies over the last 11 years.

Pensions

Nannytax found that 90% of nannies are required to be enrolled into a pension scheme. As part of this, employers are required to contribute 3% and the nanny must contribute 5% to their pension.