Thank you all for your views. Although our contract states that pay will be reviewed every year it also says that it will not necessarily be increased i.e a rise is discretionary but we must review the situation. I do value my nanny and show it with generous birthday and christmas presents, allowing her to leave early if I am home early and accommodating extra leave requests.

It is good to know that there is not necessarily an expectation of an annual rise.

Agree with many of the suggestions here re xmas bonus, presents, leaving early etc (all of which we do in my family) but I do find it curious that the norm and mindset for discussing wages for nannies and childcareres is still net and not gross salaries . All the advice from payroll managers (nannytax, PAYE for nannies etc) is to review everything in gross terms as this is the real cost to you as an employer e.g. a nanny working a 45 hour week will be earning a salary of around £35k p.a. which is right in line with the average London salary in Financial Services (www.payscale.com).
You absolutely can't put a price on looking after your children but it is worth doing some benchmarking.

Hi, I'm a nanny and have had several jobs that have lasted many years.
Although pay review was written into my contract a pay rise was never guaranteed. You are currently paying the going rate, if not a bit above and there is no reason why you should feel obliged to give one.
I've had a nice Christmas bonus on years when pay rises haven't been given.
If you feel you need to acknowledge your nanny for her good work on a monetary level then that would probably be as appreciated.

It's tricky. I haven't had a payrise in my own job for over 3years despite performance grading well above expected. The reason is driven by the market. No one is getting pay rises. However, I do believe you should reward and recognise excellent work. I do annual Xmas bonus, give v nice birthday and Xmas gifts and do lots of goodwill gestures eg nanny can leave early on days I get back early, we had a bout of long term sickness but it was a first and paid full pay the whole time she was sick despite paying for emergency childcare on top.

If they are good and you want to retain top talent then you should reward but this is not always hard cash. Even though, that's always lovely,

I am a nanny and I have 2 jobs one at £8 net and one at £10 net. I do not expect a pay rise every year. As a norlander we were told we could get £15 an hour. But the recession has come and all families are tightening their belts. But you agreed when you signed the contract to give your nanny a rise every year, so you obviously were fine with it at the time. But if my employer came to me with a good reason why I shouldn't get a pay rise I would talk about it. You can write a new contract next year and maybe say a 2.5% next year or 5% pay rise up to a certain amount an hour. But I agree with a previous poster if she is a great nanny try to keep her.

I am a nanny who has been on £10nph for 6 years!! I won't complain too much nannies earn a good wage but I can only wish for an increase...

I agree that if your nanny were to stay with you for a long period of time then with annual pay rises, she could end up being paid above average. However this is commonly the case with many different careers.

Also, long service is definitely something that should be rewarded and is a great incentive for your nanny to stay with your family. Keeping the same nanny for as long a period as possible is so important in my eyes. My aim is that my youngest has the same nanny until he starts school, fingers crossed!!

Hi, our first nanny is about to start so I haven't had this issue yet, however I think I would increase pay only if the going rate for nannies had increased so that her pay was now too low. I wouldn't increase pay automatically, as you say my pay doesn't increase automatically!

I am interested to know from both nannies and employers the position on annual pay reviews. Our nanny contract includes standard wording that pay will be reviewed annually. We employed our nanny at what was then the going rate of £10 p.h. net and after a year increased to £10.50 p.h. net. etc.
However, as a percentage increase that far outweighs any pay rise I ever receive and I can see that if our nanny stays with us for several years her pay will then be at a level vastly above the "going rate".

I am very happy with my nanny so there is no reason not to increase her pay from that perspective but her responsibilites have not increased in any way and I don't automatically get a pay rise each year so I just wondered if everybody else automatically gives/receives annual pay rises or not?