Childcare: Nannies or Nurseries?
So, you’ve decided to start a family. You’ve braced yourself for sleepless nights, you’re ready to tackle a mountain of nappies,
you’ve bought the latest and greatest buggy. But have you
thought about childcare costs?
According to a recent survey, average childcare costs rose by 5% last year, making the total average cost of sending a child to nursery part time around £6,800 per year¹. That’s before you’ve considered factors such as living in a major city like London, which can make childcare more expensive.
It’s likely you’ll spend around a third of your income on childcare. You may wonder which is more cost effective – nanny or nursery? We’ve weighed up the pros and cons of both, so you can make the best choice for your family.
Nurseries are a popular option. They’re affordable, accommodating, and ideal if you have young children. Nurseries tend to charge a fixed cost per child. If you have more than one, you might be able to negotiate a discount. Nursery costs also vary depending on where you live, for example, nursery childcare costs in London are likely to be more than in Yorkshire.
The most important thing when choosing a nursery is to shop around. But start early, the best nurseries may already be booked up. If you’re lucky, your workplace might have a creche on-site that you can take advantage of.
A nanny may seem like a luxury but depending on where you live and how many kids you have, they could be a better option for your bank account.
A nanny may seem like a luxury but depending on where you live and how many kids you have, they could be a better option for your bank account. Generally, nanny costs don’t differ much by location and they charge by the hour, regardless
of how many children are in
“Nannies are highly skilled and likely to be more flexible to your needs. You could also split costs by sharing a nanny. .”
Nannies are highly skilled and
likely to be more flexible to your
needs. You could also split costs
by sharing a nanny with friends or family. Cheaper childcare for you, friends for your kids to play with, it’s a win-win.
But, as with many things in life, excellent nannies don’t come cheap. You’re responsible for sorting their tax and national insurance contributions, as well as paying into a pension if they earn over £10,000 a year.
COMPARING THE COSTS
Nursery costs from Family and Childcare². Trust 2020 and average nanny wages from Nannyplus³.
Get help with childcare costs
When you’re planning your family’s future, it’s good to know how things might change. Here are top tips to help you prepare, so your sleepless nights are reserved only for your energetic little one:
- Create a game plan with Peach – we’ll automatically calculate the cost of nurseries in your region and help you understand how your finances can meet this goal. Once you’re set up, we’ll review your monthly contributions and adjust as needed, to make sure you’re always covered.
- Connect your accounts – if you’re splitting the cost of childcare with your partner, see the big picture by safely and securely connecting your accounts in Peach. We’ll assess the financial power of both your incomes and plan accordingly.
- Adjust your savings goals – maybe you want a bigger house, a safer car, or to start saving for your child’s education? Tell us what you want to do, and we’ll help you balance childcare costs with other life events which may impact your affordability, so you build the future you want for your family.
- Claim credits and allowances – there are two ways you can get help with childcare costs. First, you can claim up to £20 per week in tax credits for children up to the age of 16. Second, if your child is over 3 years old, you can claim up to 30 hours of tax-free childcare per week. Check if you’re eligible on gov.uk⁴ and make the most of these schemes to save money.
At Peach, we can help you build the future you want for you and your family, by offering smart insight that will power your life and the most important events in it. You keep on living; we’ll take care of the little things.