Record £4,500 pay rise for London nannies – what does a nanny cost where you are?

Taking on a nanny in the capital now costs £4,498 more than a year ago, according to the latest gross figures for the tax year 2024/25 published annually by Nannytax, a nanny payroll provider and employment expert.

The average gross hourly rate for a nanny in London is now £19.51, equivalent to £50,726 per year for a full-time, live-out position working 50 hours a week.

It means nannies in the capital have had a record 9.7% pay rise over the last year. Over the past five years, the average wage of a London nanny has increased by 46%.

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Parents are currently entitled to 15 hours of free childcare per week once their child is nine months old, increasing to 30 hours once they turn three. However, you lose this allowance once you or your partner’s salary hits £100,000.

We look at how high earners can boost their pension and cut childcare costs using salary sacrifice in a separate article.

(Average gross live-out nanny salaries for tax year 2024/25. Source: Nannytax.co.uk)

It is a similar picture around the rest of the UK. Over the past five years, the average UK wage for nannies has increased by 50%, according to Nannytax’s analysis. This doesn’t take into account extra costs like paying employer’s national insurance as well as contributing to the nanny’s pension.

Families living in Greater London and the Home Counties can now expect to pay £17.86 per hour or £46,436 per year for a nanny, an increase of 5.5% or £2,418 on the previous tax year.

(Average gross live-out nanny salaries for tax year 2024/25. Source: Nannytax.co.uk)

Across the rest of the UK, the average wage has only risen by 1.7% in the past year, to £15.77 per hour or £41,002 per year. But parents will still need to budget £676 per year more in nanny fees compared to the previous year.

Kirsty Wild, nanny employment expert at payroll provider Nannytax, said: “Increasingly, families are hiring nannies willing to take on additional responsibilities – such as PA duties, special educational needs (SEN) support or tutoring – in a hybrid role that commands a higher price. Agencies report this premium is around 20%.

"But there is a high price tag on reliable, consistent and flexible nanny care in general.”

Nannies on six figure salaries

The number of nannies paid six-figure salaries increased by 26% between the past two tax years, according to Nannytax’s analysis.

Though these top earners make up less than 2% of nannies on payroll, nannies on salaries of above £90,000 per year increased by 32% during the same period.

The highest average hourly rate for a nanny regionally (outside London) is the West Midlands, where nannies charge an average £17.84 per hour, or £46,384 per annum for a full-time post.

But the biggest regional increase has been in the North West of England, where average nanny wages have risen 15% in the past year.

Just over half (53%) of families who hire nannies do so on a part-time basis – for 21 hours per week on average – with many plugging childcare gaps before and after school.

Hiring a nanny for 21 hours per week costs, on average, £410 per week in London or £331 per week in the rest of the UK.

(Average gross live-out nanny salaries for tax year 2024/25. Source: Nannytax.co.uk)

(Average gross live-out nanny salaries for tax year 2024/25. Source: Nannytax.co.uk)

Wild said: “Despite the vital role they play in the UK’s childcare landscape, nannies are not included in the 30 hours free childcare scheme, which puts them out of reach for many families who would benefit hugely from working with a nanny.

“These include parents who work shifts or long hours, as well as children with complex care needs or who require language support.”

For those looking to reduce childcare costs, nanny shares are well worth considering, Wild added.

The families involved pay at least minimum wage to the same nanny, which is cheaper than the going rate. Eligible working parents can pay Ofsted-registered nannies via the underused Tax-Free Childcare scheme.

However, three quarters of nannies are not on this register. So, families who want to use this scheme might benefit from paying their nanny’s annual Ofsted registration fee.

“Families employing nannies should check they’re compliant with tax and employment rules. Common oversights include assuming nannies can be self-employed, when the vast majority must be employed, and adding a nanny to a company’s payroll, which isn’t allowed,” Wild said.