Can I afford a nanny?

[HouseofHills]

I’m currently pregnant with my first DC and trying to plan how we’ll manage childcare when my 12 months mat leave ends.

Our combined net pay is £8300 per month. We have a mortgage of £3500 per month. We live in a 3-story Victorian house with high heating costs and very limited savings as we recently moved and poured all our savings into the deposit and renovations for our house.

I have the option of dropping down to 3 days per week at work which will mean our income will go down to circa £7000 per month. I have the option of working from home for 2 of those days but my job is demanding and I generally work 8:00-18:00.

I’d prefer a nanny to nursery for various reasons but I’m not sure we would be able to afford a nanny for those three days considering on costs etc? I’m also considering working 4 days. My mum is a 45 minute drive away and is happy to help out with childcare 1-2 days per week but it can take a lot longer during rush hour and I don’t think it‘s fair for her to come to my house so early to help with childcare.

I’d love to hear your advice on the best way of managing childcare and from people with a nanny on how affordable it is and any additional costs.

Thanks in advance!

What was the discussion, between you and your partner, about this BEFORE you became pregnant? Has something changed since then or did you simply not discuss this before?

I would say it's tight - our nanny is (5 days) about £3,500 per month plus 15% for NI and pension. We could maybe have got someone abotu 20% cheaper with less experience but not much cheaper than that (we're in London).

@SuperWomansHandBag in what way is that helpful?

We have a very similar financial situation to yourself. I had my first DC in Nov 2022 and went back to work in September this year. Our nanny does 8.30-6 4 days a week and we use my mum / his mum and our own annual leave to cover the other 1 day. It's tough. The nanny takes most of my salary, there isn't much spare, plus factor in extras as an employer, petrol, food etc. that said I wouldn't change it for anything. She's amazing and my daughter is extremely happy!

I don't know if that's terribly fair superwoman. Most people would assume that a family can raise a child easily on that kind of net income, it's only when you really look you see how dear it is.

nannies are much more expensive than nursery, you'd have to be clear what the advantage you are buying is. Also you would be their employer so yes there are a number of ongoing additional costs. I think you could afford it but it would be a huge amount of your own income equivalent

Well it depends how much you have left after you have paid your other bills surely?

It doesn’t sound like it though unless you have very low spend on other things. Your mortgage costs are high and presumably aren’t going to get any better in the short term and might go up considerably?

Lol are you trying to suggest that some version of this discussion would lead us to conclude that we shouldn’t have a baby because shock horror we might have to use nursery instead of a nanny? The discussion was that I’d prefer a nanny to nursery, DH has no preference. We’d see how I felt in terms of how many days I’d like to work closer to the time and whether we can stretch to a nanny. My mum said she’d be happy to help out.

My experience demonstrates that it can be affordable on relatively average salaries but you must be willing to sacrifice. We've downgraded our food, holiday and social life expectations considerably for the foreseeable future. As I said, it's tough, but the outcome has been absolutely worth the cost. My nanny also tidies my house, runs errands and looks after my dogs. She's a superwoman and worth her weight in gold. She's flexible if I'm running late and works hard to keep us happy. I have had a few "low" days when I think of all the things I'm missing out on due to lack of funds, but we do still have a lovely life, and the time we have the nanny will be relatively short in the grand scheme of things.

One thing to consider is how you'll find your nanny. I ended up using an agency after failing miserably searching myself. The agency fees are significant - 10% of annual income. So you need to a) negotiate and b) factor in a big upfront fee!

3 days per week - how many hours? If it was 7am-7pm, then that is 36 hours per week.
Location will make a difference to nanny salary, but for calculation purposes lets say you can find someone for £16 gross an hour (I earn under that in West Surrey).

£16 x 36 x 52 = £29,952 so lets call nanny salary £30k gross.
What would be reasonable daily expenses? £5, £10? It depends what they do... yesterday I walked to/from toddler group, so it cost £2. A few weeks ago, we went by bus (toddlers love going on a bus) and it cost £6. Some activities will cost more than £2, for example Forest School sessions may be £8.
Have a budget for activities and travel. If nanny needs to use their car, then expect to pay mileage of 45p per mile for all work miles. Thinking of that... consider how a nanny would get to/from your home, and where they would park if they are driving - do you have a driveway they can park on?

£30k salary.
£30 per week for activity expenses (48 weeks = £1440).
Payroll admin (lets say £250 a year, if contracting that out to a nanny payroll company)
Employer NI: around £2900
Employer Pension contribution: around £700
Total: £35290. So lets round up to £35,500. So that is nearly £3000 a month which you need to find from your take home pay.

Thank you so much, this is incredibly helpful!

We’re based in Manchester but I think costs are similar to those you’ve stated.

It looks as though we can’t afford it for 3 days, I can ask my mum to do one day and just have a nanny for two days but it sounds like it will still be very tight!

My husband does have the option of doing extra weekend work which is highly paid (e.g. one Saturday a month would bring home an extra £1000) which gives us a bit of a safety net for things like interest rate rises as others have mentioned but we don’t want to factor that in as a must to meet our basic costs because we want him to be home as much as possible with the baby.

I would say no unless you are happy to spend the majority of your disposable income on it and minimise other expenses. The huge mortgage is what's stopping you having enough disposable income to cover a nanny IMO.

Looking very simply, if your net income (3 days pw) is 7, less mortgage of 3.5, that leaves 3.5 for all other expenses. A good nursery for 3 days per week might be about £1k a month leaving you 2.5 for food, bills, travel etc. That sounds doable.

Just as an aside nannies are much better vfm when you have a second child!

How about a good childminder?

As you are outside of London, I agree with the poster above that it would be at least looking at local childminders.

We pay just shy of £30k a year for full time nanny including our NI tax and pension contributions. Have a look on nanny tax website for a calculator. Our nanny doesn't go to paid groups, she visits the free church groups and also meets up with other nannies for play dates. It's about £6 a week for those.

We pay just shy of £30k a year for full time nanny including our NI tax and pension contributions. Have a look on nanny tax website for a calculator. Our nanny doesn't go to paid groups, she visits the free church groups and also meets up with other nannies for play dates. It's about £6 a week for those.

Thanks so much for sharing your experience - really helpful to know you’ve found it worthwhile and have managed to make it work financially.

The fewer days you want a nanny the harder it will be to find someone.

You have to add on the employers NI too.

I think it will be tricky.

We were paying £36k for four days a week 5 years ago.

Thanks everyone, we are going to look more into childminders and nanny shares

I think it'll be tight. I think you also have other factors to consider too though as to whether it's value for money. We found it cheaper to pay out for other services to help keep our household running smoothly, so when we are not working we can be more focused on our kids. A twice weekly cleaner, ironing service, gardener for the lawns and hedges, even things like a scheduled at home car valet service once a month, and wheely bin clean once a quarter! We both work high pressure jobs and are acutely aware we don't want our kids to just see us work and do house work vs look after them.

Another aspect is temperament of your child. I have two. One has adored nursery from the off, makes attachments quickly and is highly social able. What started as 3 days a week at nursery and the rest between me and DH quickly became 4 as she loved it. My second is more sensitive and slower to settle at nursery. I've got a nanny for one day a week (nanny share whereby I'm making up for someone else only wanting her 3 days a week), she's in nursery for 3 and with me for 1 day.

Nothing helpful to say on the nanny, but regarding your mum having to get up early to get to you for childcare, could/would you drive to hers the night before then work from her house and she minds the baby there? We do something similar and it works really well. My mum is happier with the kids in her own space and I am happy that she isn't in my house criticising how dirty my bathroom is! Obviously lots of variables that would make this an option/not. She recommends the set up to all her friends as they become grannies too.

Thanks, this is a great idea! Can’t believe we didn’t think of that.

Well done @nannynick for great calculations

I was going to say if you have a spare £3k + a month then yes afford a nanny

If not look at cm

I havent read all the thread so apologies if repeating. But don’t forget tax free childcare if you earn less than 100K. Government pays 20 percent . Or the funding that is coming in (possibly if no election changes ) for 9 months plus. Nannies if Ofsted Registered can be paid with tax free childcare . But Nannie’s will never receive funding as don’t officially deliver EYFS and are when Ofsted registered on voluntary register.
One big advantage of a nanny is they will care for sick children - babies average nine colds per year and some of temp etc might have you excluded from nursery , plus they will catch hand foot and mouth , chickenpox etc earlier, more frequently at a nursery.
it is also worth considering a good childminder . Many ex teachers and other childcare professionals work as childminders and provide excellent care .