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Mrs A C - London SW17

Is the crunch yet to come? The Nannytax Annual Wages Survey

The best-paid nannies in the UK have seen their earnings fall, but as the economy dives our annual wages survey reveals some other surprises.

In a year when everyone is anxiously waiting to see the effects of the changing economic climate, it is so far only the wages of nannies in central London that have been hit by decreases. Wages in the rest of the country have continued to rise, albeit more slowly than last year. But trends tend to strike London first, before being felt elsewhere. So nannies working outside London might also expect tougher times ahead.

A record number of nanny agencies took part in our 2008 wages survey. They reveal that salaries for daily nannies in central London are down by nearly 4 per cent on last year, and for live-in nannies they have dropped by a little over 2 per cent. With the costs of fuel, food, utilities and council tax rocketing in the past year, it is the live-out, daily nannies who bear them who have been hit the hardest. Those who live in their employer’s home are more protected from the rise in living costs.

Yet it is worth noting that 30 per cent of daily nannies in the capital can still expect to take home £500 or more per week after taxes and that our agencies report no daily nannies in central London taking home less than £300 net per week.

Salaries for live-in nannies in outer London and the Home Counties have shown below-inflation increases of 2.77 per cent, while daily nannies have seen smaller increases of around 1.64 per cent. As we travel further outside the capital, the picture looks slightly different. In other towns and cities nannies generally have seen a healthy pay increase of nearly 5 per cent. In the countryside, salaries for live-in nannies have increased by 4.75 per cent, while their daily counterparts have seen a rise of around 4 per cent. Nannies working outside London could be bracing themselves for the drop in wages to spread. However, 83 per cent of the participating agencies say they are confident about nannies’ earning potential and predict that salaries will remain the same in the coming 12 months. Across the country it is daily nannies who have had the smallest pay rises. But take a look at the wages table (opposite) and we can see that in the three years preceding 2007 – a standout year of significant increases – the nationwide average increase for daily nannies was a relatively modest 2.4 per cent. In light of the current economic situation, this year’s figures, which show a national average increase for daily nannies at 1.7 per cent, are in fact surprisingly good. For live-in nannies the national average pay between 2004 and 2006 rose 3.1 per cent, where it now appears at around 2.5 per cent.

Valued option
Looking at other trends across the nanny industry, although agencies predict that the number of full-time positions will continue to drop, many mothers are returning to work earlier than they expected as families find themselves urgently needing a second income. Additionally, where parents have to increase their workload or are required to work longer hours, many will find nannies the best childcare option as they can provide significantly more flexibility than other care providers. The Ofsted voluntary childcare register may also indirectly support a continued demand for nannies, since parents who employ a registered nanny can receive some financial relief towards their childcare costs. Families who in the past wouldn’t have considered employing a nanny may now come to regard it as a viable childcare option for the financial benefits alone, regardless of the higher quality of nanny it promises. Now in its third year, the voluntary part of the Ofsted Childcare Register has suffered a slow start, mainly due to limited information being available on the scheme. But our agency survey suggests that nearly 55 per cent of parents seeking a nanny are now expressing an interest in employing an Ofsted registered one – an increase of 12 per cent on last year. This reflects not only the growing demand for affordable childcare, but also the ever more professional nature of nannying. The number of nannies either registered or in the process of becoming registered with Ofsted has also increased, from 28.5 per cent to 39 per cent, while 66 per cent of the agencies in the survey believe that economic uncertainty will encourage yet more parents to employ a registered nanny in the coming year.

Well insured
In order to become registered with Ofsted, nannies need to have public liability insurance. However, it is noted that even if an employer isn’t necessarily looking for a registered nanny, they are increasingly making requests for fully insured nannies. Agencies report that on average, 31 per cent of the nannies on their books are now insured, or in the process of becoming insured. This number is expected to grow in the coming year as more pressure is put on nannies to set themselves apart from the competition in the search for a full-time post.

Changing demands
The changing needs of nanny employers leave some agencies struggling to meet their clients’ demands, with 40 per cent or more of the jobs that agencies are being asked to fill now part-time. 

Part of the problem is that some nannies still remain reluctant to consider taking on two or more part-time jobs in order to make up a full working week, and still hold out for that increasingly elusive full-time, sole charge position. In these circumstances, nannies should not only be prepared to adopt a more flexible approach to how their working week is structured. With agencies reporting an increase in requests for combined nanny and house management duties, nannies would do well to consider tackling a wider range of tasks. As competition for jobs intensifies, nannies who refuse to perform duties outside their typical childcare responsibilities may be less successful in the current market.

Flexibility rules
The straitened economic climate indeed affects everyone. Even parents whose jobs are secure may find themselves working longer hours as pressure increases. In times like these a good nanny can really prove her worth by providing more flexibility and understanding of how circumstances can change for her employers. While nannies offered the most convenient of childcare choices even before the credit crunch, in our survey 83 per cent of agencies predict that nannies should expect to be still more flexible in the coming year, in terms of both job duties and working hours. Despite this, only 14 per cent expect that nannies’ actual working hours will increase. One option that can combine flexibility with affordability is nanny sharing, where two (or more) families share a nanny between them, and the nanny either cares for all the children at the same time, or works part of the week for one family and part of the week for the other. Sharing is the most affordable way to have a nanny, yet it would seem that up to now not many families may have realised it or taken advantage of it. Nannytax has seen a dramatic increase in enquires to our nannyshare department in the latter half of 2008, and a fifth of our client base now share a nanny with another family. Perhaps 2009 will be the year when nannyshares really come into their own as a household term.

Future commitments
With fewer jobs available and stiffer competition nannies not only have to be more flexible, they must also prove their commitment to their career pursuits. The UK economy may be unlikely to recover for some time, but parents will still need to work – and work more, if they can find it – and good-quality, reliable childcare will continue to be sought after. It’s more important than ever, then, for nannies to push their professional credentials. These are not times for resting on past achievements; they must keep their skills up to date, and a nanny who finds herself out of work could make the best of it by taking the opportunity to do an extra course and extend her skill base. It could be what closes the deal in her next interview.

 

 WAGES SURVEY TABLE 2008

------- LIVE IN NANNIES -------
  Central London 

Outer London

  Weekly net  % change
 Annual gross
 Weekly net
 % change
 Annual gross
2008  347  -2.13  23,525  304  2.77  20,277
2007  355  8.2  24,545 296  4.6  19,988
2006  328  4.5  22,582 283  2  19,079
2005  314  7.5  21,573  278  4  18,776
 2004  292  -5  19,956  267  4  18,007
             

 

 Other towns  Countryside
   Weekly net
 % change
 Annual gross
 Weekly net
 % change
 Annual gross
2008  282  4.84  18,618 280  4.74  18,466
2007  269  4  17,908  268  3.6  17,797
2006  258  3  17,142  258  1.5  17,142
2005  250  5  16,612  254  7  16,910
 2004  238  2  15,760  237  1.8  15,689
------- DAILY NANNIES -------

 

Central London
Outer London
  Weekly net
 % change
Annual gross
Weekly net
% change
Annual gross
2008 449  -3.61  31,203 374 1.64 25,559
 2007  466  14  33,179  368  6.7  25,548
 2006  408  2  28,786  344  3.5  23,825
 2005  399  4  28,171  332  2  22,971
 2004  382  -0.5  26,937  325  2  22,514
             

 

 Other towns
 Countryside
  Weekly net
% change
Annual gross
 Weekly net % change
Annual gross
2008 340  4.75  22,988  334  3.91  22,544
2007  325  8.6  22,263  321  8.6  21,937
2006  299  2  20,322  296  1.5  20,095
 2005  293  3  19,948  292  4.5  19,863
 2004  284  3  19,335  279  2.5  18,939