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Impact of the rising cost of childcare in UK

The spiralling cost of childcare is forcing women to reduce their working hours as families attempt to cut the rising cost of living according to several reports.


According to the Childcare Survey 2022, parents of children aged three or below paid c. £260 per week for nurseries. In London, this can go up to c. £325 per week, or c. £17,000 per year. If you have two children, you can double this to c. 34,000 per year. You will have to factor in fuel and parking costs as well (for pickups and drops), and the annual spend can easily go up to c. £36,000 per year or more if you’re based in certain parts of London. By the way, don't forget the 10-18 months wait that some nurseries have posted the pandemic.


One thing that needs to be added to this calculation, but is quite difficult to quantify, is the time cost of picking up and dropping children from and to nurseries and the loss of productivity due to interruptions in a typical work schedule.


Adding to the woes, instead of coming out with a proactive way to support rising childcare costs, the government is planning to reduce staff to child ratios in nurseries - putting your child’s early development as well as safety at risk. 


In essence, you’re paying through your nose to get less than ideal childcare that also causes significant disruption to your work and affects your pay rise, bonus, etc. as well.


Hiring a nanny, on the other hand, often cited as the most expensive childcare option, may still work in your favour, especially if you satisfy the following criteria: 

  • Both parents are working (or working, single-parent),

  • You need childcare support for more than one child,

  • Your preferred nursery/childminder is not within walking distance,

  • You have some space in your home to accommodate a nanny, and

  • You strongly feel that early years development and overall safeguarding of your child is a non-negotiable


A full-time, live-out nanny will cost about £11-£18 per hour (gross wages) on average. Assuming you go for a nanny with a little bit of experience (not several years), you are likely to find someone at c. £14 gross per hour in London for 10 hours a day, or c. £36,000 per year. Add to this about c. £4,000 of Employer NI and Pensions contributions, and the total cost is about £40,000. Less experienced nannies can come in at a lower cost as well.


Comparing apples to apples, there is a difference of c. £4,000 or less when comparing a nursery to a nanny, for two children, in London. But if you can afford it, what you get in return is: 

  • Reduced stress and increased productivity, leading to better pay outcomes at work. If you send your children to a nursery, you may experience higher levels of stress and anxiety due to:

    • Children falling sick often (bugs at the nursery) with parents having to take unplanned days off,

    • Lack of flexibility as the nurseries have a fixed start and end time

  • The flexibility to be able to check in on your children during the day, and most importantly,

  • Better wellbeing and early development outcomes such as:

    • Increased obesity and nutritional deficiencies in children due to poor quality food offered in nurseries,

    • Anxiety in children due to staff churn at nurseries as well the high-stress environment (and low wages) that the staff operates in.


Like the proverbial straw that breaks the camel’s back, it is often the agency cost/finder’s fee, which can be the deal breaker, which can be upwards of 7% of the nanny’s annual salary. In London, you’re looking at at least £2,800 or more - and this is completely avoidable.


Our position has always been to encourage working mothers to find a childcare solution that works for them and their families instead of entirely giving up on their jobs/careers. We believe that the answer lies in finding smart ways to save on the overall cost of childcare. 


Some cost saving alternatives parents can explore are:

  • Exploring how the government can help with childcare costs,

  • Working out part-time arrangements at work, 

  • Getting into a nanny share arrangement with a neighbour or a local family,

  • Working with digital platforms like Tllid that are at least 3x cheaper than any typical agency and with fixed transparent pricing.

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