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In a time when most workers are being expected to tighten their belts, what could be driving nannies' salary rises?


Nannies take on more duties

At the end of 2010 we looked back on a challenging year, with the new coalition government responding to economic pressures and making cuts in virtually all areas including childcare concessions, while raising VAT by 2.5 per cent. Back at the end of 2009 there had been a positive outlook for the nanny profession, with earnings slightly up on the previous year. Now we can take stock of 2010 with the latest survey results and see if that trend continued.

Amid the economic constraints, nannies' pay has shown some surprisingly healthy increases. Their employers, however, need to get more for their money, and nannies are finding that their duties may not be as clear-cut as expected. While voluntary Ofsted registration provides some financial relief for nannies' employers, it continues to be a source of confusion and controversy for the nannies themselves, often meaning an additional cost that brings no real benefit for the nanny.

Many of the agencies we surveyed were of the opinion that there has been no discernable change in salaries. This would come as no surprise considering that redundancies, pay cuts and pay freezes have been commonplace in the private sector over the past two years. Yet in spite of this, the survey figures show that nannies appear to have fared remarkably well.

Live-out Nannies

In 2010, central London live-out nannies were earning an average net wage of £490 per week, giving them an annual gross salary of £34,127 and representing an increase of 5 per cent on 2009. In Greater London and the Home Counties, the average weekly net for live-out nannies was £422, giving an annual gross salary of just over £29,000 and a surprising year-on increase of 11 per cent. A highly favourable rise was also found in the rest of the UK, with an average weekly net of £360, an annual gross salary of £24,335 and an increase of 10 per cent.

Live-in Nannies

Central London live-in nannies also fared well in 2010, earning an average £380 net per week, giving an annual gross salary of £25,842 and an increase of 7 per cent on 2009. Greater London and the Home Counties saw a 6.6 per cent increase, with a weekly net wage of £336 and an annual gross of £22,523. Live-in nannies working throughout the rest of the UK saw an average weekly net of £283, an annual gross of £18,527 - only a 0.35 per cent increase, but up on 2009 nevertheless.

Nanny does more

The economic dip has also led to mothers returning to work, often much earlier than formerly, and parents working longer hours and taking on more responsibilities. The knock-on effect is that nannies are now expected to work harder and longer for their money, with families wanting more than just childcare. When parents were asked what additional duties their nannies were asked to fulfill, administration and cooking rated highly, and 75 per cent of employers requested housekeeping duties. The agencies corroborate this - 98 per cent report that their full-time nannies can work between 40 and 60 hours a week, and 74 per cent say their part-time nannies will work up to 30 hours per week. To put this into perspective, consider that the typical full-time office job is for just 35 hours per week.

It appears that in order to save money, families are looking to combine their domestic help, such as asking the nanny to take on a certain amount of housekeeping duties rather than hiring a regular cleaner. With childcare being a non-negotiable priority, they are asking the nanny to contribute in other areas, so 98 per cent of the nanny agencies surveyed agree that nannies need to be more flexible in the services they offer. But this may be the reason for the higher-than-inflation pay increases seen in this year's survey, as nannies work longer hours to fulfill these duties.

Employer's choice

The popular image of the nanny employer remains a high-income family, but in reality it is not necessarily the case. Of the Nannytax clients who completed the survey, 55 per cent have a household income (before tax) of £70k per year or less, with 38 per cent earning £50k or less and 18 per cent £30k or less. It's true that nannies are not always the cheapest childcare option, and the survey found that it's because of this that nannies are often not parents' first choice - 54 per cent of clients said they considered other care options, such as a childminder or a nursery. Nanny agencies concur, with 74 per cent of agencies saying their clients explore other means of childcare before opting for a nanny.

As the cost of other forms of childcare continues to rise and lifestyles become more demanding, many average-income families are considering nannies as a viable option that offers convenience and flexibility. Sharing a nanny between families, in particular, provides an opportunity for those with household incomes at the lower end of the scale to pool their resources to achieve reliable and convenient childcare. While 61 per cent of agencies say they have seen no increase in nanny sharing since 2009, 40 per cent of the nannies placed in 2010 were to work part-time or in a nanny share, showing that it's still a popular solution.

Ofsted Irregularities

When Ofsted first opened its doors to register nannies voluntarily in 2007, it was warmly welcomed by agencies who have long believed that nannies deserve greater recognition. In being approved by Ofsted, nannies could demonstrate their professionalism and high standards, as well as offer some financial relief for their employer who became eligible for tax breaks by hiring them. Ofsted registration made nannies very attractive and theoretically, the registered nanny in higher demand could command a higher salary. In our 2007 survey, Frankie #666, director of Harmony at Home, said of Ofsted registration, 'Fantastic - a step in the right direction. Finally, nannies will be respected as professionals.'

Today, the Ofsted voluntary childcare register elicits a very different opinion. Feedback includes comments that the process is lengthy and complicated and mandatory requirements are not being checked, so potentially anyone can register as a nanny. For example, one agency remarked on having 'met several Ofsted registered nannies with no qualifications or common core skills'. Another mentioned that 'many nannies are registered but do not have insurance'. A member of staff at Harmony at Home recently applied to become an Ofsted registered nanny, only fulfilling part of the compulsory criteria, and obtained a registration with no trouble. In contrast to her comment in 2007, today Frankie #666 says, 'Parents are being led into a false sense of security.'

But Ofsted registered nannies are still in demand, with 64 per cent of parents in this year's survey saying they would prefer their nannies to be registered, and 58 per cent of Nannytax clients seeing Ofsted as a mark of high standards. However, credibility comes second to financial support. As many as 77 per cent of employers say financial relief is the primary reason they would want a registered nanny, and 66 per cent of agencies stated that the main reason their nannies register is that the employers request it; 57 per cent said it made her more employable but only in terms of childcare vouchers. The nannies themselves are not bothered about becoming registered, said 82 per cent of agencies, so it's questionable whether they still believe an Ofsted registration offers any leverage when negotiating a salary. And although 77 per cent of nanny employers say they would contribute to the expense of becoming registered, many nannies feel put off, believing that there's no real benefit for them.

Despite having little faith in Ofsted, dedicated nannies still take the trouble to undertake a lengthy, costly and complicated registration process as if to fulfill their professional duty. It's a shame that Ofsted cannot seem to find the resources to step up and fulfill its own.

Nannies in 2011

With the coalition government still in its fledgling year, we are waiting to see what transpires in 2011 in all areas of the economy, but despite the uncertainty there is still a positive outlook for nannies. Figures show the increase in nanny pay this year are the most encouraging since 2007, suggesting that salaries may be in recovery, even allowing for the extra hours being worked.

The clear message our latest survey presents is that although nannies may not always be the cheapest option for families, they remain the most viable one, providing families with the most options for their lifestyle, convenience and time. Flexibility remains the key attraction and can give willing nannies a distinct advantage, not only in terms of the hours they can work, but also in the added help and value they can provide. Employers may be prepared to pay a bit more in return for taking on duties in addition to childcare. If a nanny is prepared to offer all this, she can prove herself an invaluable asset to the contemporary family who would be reluctant to lose her support. In an age of growing demand and convenience, for many families, nannies are still a benefit worth paying for.

Average Annual Gross & Weekly Net Salaries

Live-Out Nannies

 Central LondonOuter London & Home CountiesOther Areas
Year End Weekly Net % Change Annual Gross Weekly Net % Change Annual Gross Weekly Net % Change Annual Gross
2010 380 7.04 25,842 336 6.67 22,523 283 0.35 18,527
2009 355 2.31 23,949 315 3.62 20,934 282 0.36 18,435
2008 347 -2.25 23,525 304 2.70 20,277 281 4.46 18,542
2007 355 8,23 24,545 296 4.60 19,988 269 4.26 17,908
2006 328 4.50 22,582 283 1.80 19,079 258 2.40 17,142
2005 314 7.50 21,573 278 4.00 18,776 252 6.00 16,761

Live-Out Nannies

 Central LondonOuter London & Home CountiesOther Areas
Year End Weekly Net % Change Annual Gross Weekly Net % Change Annual Gross Weekly Net % Change Annual Gross
2010 490 5.15 34,127 422 11.05 29,009 360 10.09 24,335
2009 466 3.79 32,316 380 1.60 25,842 327 -2.97 21,843
2008 449 -3.65 31,203 374 1.63 25,559 337 4.33 22,766
2007 466 14.22 33,179 368 6.98 25,548 323 8.39 22,100
2006 408 2.26 28,786 344 3.61 23,825 298 1.71 20,171
2005 399 4.00 28,171 332 2.00 22,971 293 3.75 19,948<

Note: All figures are calculated from the 80 nanny agencies and the 485 Nannytax clients who completed the 2010 Nannytax Wages Survey