Finding a perfect nanny. Part 1. Prepare for costs

One thing I discovered after having a child is that good childcare in London is REALLY expensive. It is good that I found this out after having a child as it didn’t affect my decision. I am just imagining people building financial models, calculating ROI and concluding that it isn’t worth it.

Having read various other attachment parenting books I buy into the idea that it is best for the child’s development to have a single caregiver with whom they develop a strong bond. And if this cannot be mum or dad or grandma because they all work then the next best alternative is the nanny. Also, all my friends who continued working after having kids told me “If you want to have a career, nanny is the best option”. Your nanny will look after your child when she is sick, take her to her routine GP appointments, cook her meals, buy her clothes, stay late with her sometimes when mummy is running late and do many other things that nurseries don’t do.

This comes at a cost though.

Net rates that live out nannies quote in London are £9-10/h net. “Net” is important the word you need to pay attention to. On top of that you pay tax and national insurance contributions.

Say, your nanny works 50 hours a week.

Her net salary per year will be 50 hours/week * £9/hour * 52 weeks = £23,400. However, the cost to you will be ~£33,200. Which means that if your gross salary is £45,000 you will pay it all to nanny.

This is really expensive. Realising this for the first time hurts. Net cost per hour is a very misleading number. A friend of mine recommended to stir the conversations away from net pay and instead advertise a gross yearly salary (e.g. in the example above it will be £30,100 as the rest will be Employers National Insurance that you have to pay on top).

What can one do to lower the costs? There are a couple of options involve nannies: nanny shares and live-in nanny. Both require planning ahead as they are almost impossible to organise if you need to return to work in a month.

Nanny share means that a nanny looks after two kids of the same age and families split the cost. These nannies are usually more expensive (£10-12/hour net) and you lose some flexibility, as you will need to coordinate with the other family, drop off/pick up the child (at least some of the days), agree what you do when one of them falls sick, etc.

Live-in nanny lives in your house, which means that you need to have a spare bedroom (and bathroom) for her and be open to having someone else living in your family home. Savings are quite substantial because a bigger part of the salary will fall under the tax free allowance. E.g. live-in nanny may cost £18,000 gross (compared to £30,100 in the example above). Families often ask live-in nannies to work 12 hours per day and in addition babysit for one morning or evening on the weekend.

 

Helpful websites are:

http://www.nannypaye.co.uk/

http://www.nannytax.co.uk/

This post is part of “Finding a perfect nanny” series:

  • Part 2. Advertising for nanny job
  • Part 3. Interviewing nanny candidates
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