Childcare shortages, nursery costs and Brexit push up salaries for London nannies
London is currently experiencing a strong demand for nannies, largely driven by the pandemic, Brexit, childcare provider shortages, and the soaring cost of nursery places.
As a result, nanny salaries have jumped by 13 per cent across the UK, the biggest increase in five years, and 8 per cent in London.
A nanny working in London now earns an average gross annual salary of £39,806, or £15.31 per hour, while those in the rest of the UK earn £32,552, or £12.52 per hour, according to figures published by Nannytax, a payroll provider and nanny employment expert.
In the Home Counties and Greater London, the average salary is £35,438, or £13.63 per hour.
The figures, published in the annual Nannytax Salary Index, are based on almost 8,000 of the company’s internal payroll records for the tax year 2021/22 and calculated for live-out nannies working 50 hours per week.
Regionally, nannies in the South East of England (£14.59 per hour) and Yorkshire & The Humber (£13.85 per hour) are receiving the highest pay outside of London.
Why is demand so high?
Agencies across the UK are reporting high demand for nannies, driven by a number of factors.
Kirsty Wild, a nanny employment expert at Nannytax, explained to Morning Wire today that “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. Some parents also decided hiring a nanny was a safer option than sending their children to nurseries or childminders.”
However, “that turned out to be no flash in the pan,” Wild continued. “Since then demand has remained very high, with Brexit rules putting the stoppers on EU nannies and au pairs working in the UK, and an increase in families – supported by changes in the workplace – uprooting to rural areas that aren’t always well-served by nurseries.”
“For some of these families, hiring a nanny is the only viable childcare option.”
Kirsty Wild
In addition, Frankie Grey, founder of UK nanny agency Harmony at Home, said that “rising demand for in-home childcare, alongside a candidate shortage compounded by Brexit, has contributed to the increases in salaries.”
Grey said: “With the quantity of jobs far exceeding the number of applicants, we are the busiest that we have ever been.”
Average nanny salaries
| Hourly | Weekly | Monthly | Annual | % change compared to tax year 20/21 | |
| London | £15.31 | £766 | £3,317 | £39,806 | Up 8.43% |
| Home Counties & Greater London | £13.63 | £682 | £2,953 | £35,438 | Up 2.79% |
| Rest of UK | £12.52 | £626 | £2,713 | £32,552 | Up 12.79% |
Potential savings
Although nannies are the most expensive childcare option, almost three quarters (73 per cent) of nanny agencies say the cost of caring for more than one child is no higher than caring for one. Approved nannies can also be paid via the Tax-Free Childcare scheme.
Wild added: “Tax-Free Childcare is, unfortunately, underused. Just over 512,000 families have signed up for it, yet some 1.3M families are eligible. This scheme can be used to pay approved nannies up to £2,000 per child per year, so we urge all eligible parents to take advantage of this discount.”
Nanny shares, where two or more families use the same nanny, are also increasingly popular, although families involved in the arrangement should be aware that each employer must pay the nanny at least minimum wage, Wild warned.