advice needed - costs of a nanny, can i afford one?

[cakefiend]

i'm returning to part-time work soon and am looking for childcare for 1yo baby. i have been unable to get a personal recommendation of a good CM in my area and am a bit uncomfortable going with a complete stranger from the council's list. but i have been recommended a nanny, and might also look at a nanny share, which i hadn't really considered before because of the cost. so i'm trying to do a budget and am finding it difficult to estimate the costs in addition to a nanny's daily rate.
basically - i can, at a stretch, afford to pay the nanny's net pay plus tax and insurance in a share, but that's all i can afford. what i am worried about is the liability of being her employer - ie potentially having to pay sick or even maternity pay. it really pains me to ask this, as i do not want to exploit anyone, but i need to know if it really is only the seriously rich who take on nannies, ie people wih perhaps £10k aside in case the nanny does stop work and then a second nanny has to be hired while the first is on sick/maternity leave?? what happens in this situation? if it happened to us i could not afford to pay and would literally have to sell the house... does this mean i can't really afford to hire a nanny? apologies for cross posting; this message also added to nanny share board.

I am not seriously rich and I have a nanny.

Sick pay need not be a problem as the minimum is statutory sick pay, which is a pittance. I offer 3 days per year paid and anything on top of that is at my discretion (She works 3 days a week for me). It is fine to offer just statutory but you need to make it clear to the nanny when you interview that that is all you are offering.

Maternity pay costs you nothing as you claim it back from the government (and in fact you get a bit extra back from the government for being a small employer). But it's the hassle of finding someone to replace her for the time she has off. You would have to find a temporary nanny to cover her. I've never been in this situation (touch wood) so not sure how hard or expensive it is to hire a replacement nanny.

The only extra costs are possible Ofsted registration if you need that (but it would save you money anyway), pay roll costs if you choose to use a company to do it for you (around £150 per year).

Hope this helps a bit. I was a bit freaked out about the responsibility of being an employer but actually it's been fine. I would highly recommend having a nanny.

I nanny share though can be more complicated but does obviously work out cheaper.

Most nanny contracts stipulate statutory sick pay rather than full pay (although many employers will pay full-pay for the occasional sick day), and I think maternity pay is rebated as you are a 'small business' so it doesn't cost you money (although will cost you in time and stress of hiring maternity cover) - www.nannytax.co.uk has some helpful info, or try ringing a company like nannypaye.co.uk and asking their advice.

brilliant, thanks for that advice

Don't forget about the day-to-day costs, things like mileage (if nanny uses their own car), activity expenses, food, heating/lighting costs.
Some nannies are very good at budgeting, others are not. You may need to keep tight controls on how much money your nanny (or nanny share) spends. As a nanny, I find a £20 per week kitty is fine for covering activities and misc.expenses (swimming, science centre, ice-lolly etc.) With luck nanny will spend less - currently I seem to go through about £3 per day, but costs can shoot up if we say go on a steam train, or go swimming during school holiday period (so no baby/toddler discount).

good to know, i hadn't thought of that either

Cakefiend - I agree with all the other messages. I am not rich, but I have a nanny as this is the only childcare solution that would work for me. What you need to do is work out how much you are prepared to pay (nanny share sounds good) and as others have said, specify in the contract that you will be paying statutory sick pay, etc.

Re daily expenses, you just have to make it very clear to the nanny what you are prepared to pay for. For example, my nanny uses the bread and milk in the fridge, but otherwise brings her own food - she does not expect me to provide her meals (and she is happy with that).

I think for only one child and part time you will find a childminder is considerably cheaper. Will you only use someone who comes with a personal recommendation? If you work pretty normal hours (i.e. don't need a really early start or a really late finish) I wouldn't think the nanny option gives you value for £. Tw+ kids and full time is another story.

When your nanny goes on maternity leave you get more back from the government than you pay out. There is a cash flow issue, in that you make the first month's payment before putting in your claim. However the cheque which comes about 10 days later is for the whole maternity pay for the rest of the tax year ie a big lump sum.

I have had two nannies go on maternity leave now. Replacing them is actually easier than if a nanny just resigns, because you get so much more warning. And in terms of her coming back, you can do the maths on childcare costs: unless you are prepared to have nanny bring her baby to work (which is your decision not hers) nanny pay does not cover child care for the nanny's child. Both my nannies said they would not be coming back, and I just recruited a perm nanny.

I agree with AN. CM will be much better value for money in this situation unless you work unusual hours. Also, I don't know where you live, but I wouldn't want to be over-reliant on a nanny share to work, if that is the only way I could afford a nanny. It is hard (at least where we are) to find a compatible family in terms of distance, number of kids, timings, and the undefinable quality of just getting along well enough. If this share doesn't work out, would you be able to find another one relatively quickly? I think it's better for you if you at least understand what else is out there, if you need a fall back plan. It's not clear to me whether your DCs will be looked after at the same time as the other families, but if it's together, it's worth emphasizing what Nick said re costs it's not just laying out your expectations for the nanny, it's going to be important for you and the other family to have similar expectations.

We had a 'recommendation' for our first nanny as well and it didn't work out at all - one of the reasons we hesitated to end it was that she was a 'known quantity' as such, etc etc. We were intimidated by the process of hiring a 'stranger.' In reality when we started interviewing for her replacement we found some lovely people and a nanny our daughter was crazy about. I suspect once you get out there and start meeting CMs from the council list you will do the same and feel more comfortable with the concept. Just make sure to take up references really carefully, and it will be fine.

Out of interest, what is the 'going rate' as it were? I have one and one on the way and am wondering what the cheapest childcare option will be once I'm back at work after DC2. We currently pay £45 per day for nursery for one and I'm at work 3 days. Does a nanny sound a cheaper option?

gingerninja - the 'going rate' depends on what area you are in and how much experience the nanny has. For an experienced nanny it will probably be from around £8 net per hour (up to about £10 per hour) which, with tax added to it, would be about £117 per day (rough estimate since if nanny has another job on the other 2 days a week already that will make it even more expensive), Add to that the other expenses..light, heat, wear and tear on your home, play group and activity fees, petrol/car allowance, nanny's meals etc.

This might help-read down the page for salary calculators

thanks again for all the advice.

i'm in london. CM would def be cheaper, but of those i've seen so far (five), most are looking after a lot of other children, ie they're doing 3 under 5s, plus before and after school kids too. my baby would be the youngest. sometimes they're in quite small places doing this. i suppose i worry that that is very hard work for them. a nanny share would just be our two babies.

i also worry about my judgement when i meet a CM or nanny who is not recommended. i've no experience of interviewing people and this is someone i want to trust with my child. it's partly confidence i know. i've copied lots of questions and advice from these threads. i know i just need to be clear and thorough.

i've been surprised at how little CMs charge, esp given that this is super high cost of living london. i've met CMs charging £30 and £35 for a long 8-6 day. i suppose it's down to supply and demand, but i hope CMs are not undervaluing themselves.

£3 or £3.50 an hour. Oh, I should be so lucky! I agree that I wouldn't want a childminder who is looking after loads of other kids. But, in 6 or 12 months, your daughter will probably love haveing lots of other kids to play with (so long as you feel the care is adequate of course).

Changing nannies can be a real PITA. So I don't know if a nanny share is going to be as trouble free as you think.

Cake
I didn't realise you'd already seen that many CMs already.

Have you considered a nursery? I loved our one in Central London, but it was more expensive than a childminder. But cheaper than the nanny.

Wow £117 per day. That is double the cost of childcare in london

harriet - what's your central london nursery? i've looked at a couple NW london but they weren't so nice - not very clean, odd managers, children not looking so happy...

do i sound like the pickiest mum ever or what?!

cakefiend, recommendations are good, but ultimately what you require from a nanny could be very different from what the recommender requires for hers.

For example, you might think a routine is important but she does not. You might prefer your baby to be cuddled whilst others might prefer stimulating toys and activities. Some parents are very protective about baby hurting himself and being 100% safe, others would rather a baby explore. Different babies are different as well.

I do think that whether you go for CM, nannyshare or nursery, you cannot get away from having to do the vetting yourself. Your gut feel for what your child will like is as good as any and usually right. And you will feel better after the settling in period. hth

i meant double that of daycare/nursery !

yes firsttimer, as Athene says, a nanny only starts to make sense with 2 children or more.

Some nurseries can be quite expensive. My DD went to one for a short time, in North London, and for a full week, for children under 2 years, it's £1500 per month !!

wow - out of curiousity, which nursery is that?

Cake
Ours was Newpark Childcare in the Barbican. I used to take DD into town on the tube with me every day (I liked the nursery loads but also liked the fact she was near me...so whatever you do don't think you rae the pickiest mum ever...) They also have one in Highbury and another they opened relatively recently in Shephard's Bush (sp?). I think it will be a bit far for you in NW London, unless you work in town and don't mind travelling (I wasn't the only parent who did this.) For various reasons, it acutally worked out more convenient than the nurseries locally. I also liked the fact we got the extra forty five minutes either side of the day. (Although many parents would undoubtedly say I was crazy.) DD still loves "going into town."

Was GBP 1400 per month a ocuple of years ago. Fee structure changed at two.

harrietthespy - did you not find it difficult travelling with a small baby on the tube? i work v. close to the nursery you mention, so will check it out. However, everyone seems to be advising against a nursery near work due to the travel and other constraints.

my main reason for considering one close to work is the same - that i could get an extra 45 minutes at work, especially as newpark care seems to be open till 7pm instead of 6pm that the nursery close to home does.

How far is your journey? Mine is 25 min once on the tube. I didn't find it a problem and someone always helped me up the stairs at Liverpool Street. People were really okay about it. The commute was fine overall.

DD got sick more frequently than when we later had the nanny, which I guess is to be expected - it's hard to know whether this was nursery care itself or the tube factor. But after three nannies, I would say that OVERALL are life was more hassel free during the period when we were just using Newpark.