Care Workers Remain Among England’s Lowest Paid as Wage Pressure Mounts
A new report from Skills for Care has laid bare the ongoing pay crisis facing England’s adult social care workforce, warning that the sector faces significant financial strain ahead of April’s National Living Wage increase — with nine in ten independent care providers set to be directly affected.
The report, Pay in the Adult Social Care Sector in England as at December 2025, published in March 2026, provides the most up-to-date snapshot of care worker pay and reveals a picture of a sector under mounting pressure despite modest nominal wage growth.
Median Pay Barely Above the Wage Floor
The median hourly rate for a care worker in the independent sector stood at £12.60 in December 2025 — just 39 pence above the current National Living Wage (NLW) of £12.21. While this represents a 5% increase (60 pence per hour) since March 2025, outpacing inflation of 2.8% and delivering a real-terms gain of 26 pence per hour, the figures underline just how narrow the margins are for the sector’s 1.5 million workers.
Regional variation remains stark. London care workers command the highest median pay at £13.00 per hour, while those in the West Midlands receive the lowest at £12.45 — a region where four in ten care workers (40%) are paid on or within 10 pence of the NLW wage floor, the highest proportion in the country.
Nearly Half Paid Below the Real Living Wage
Despite nominal pay rising, 49% of care workers were paid below the Real Living Wage of £12.60 (outside London) in December 2025 — up from 46% in March 2025. The Real Living Wage, independently calculated by the Living Wage Foundation to reflect actual cost-of-living pressures, sits above the mandatory government rate and is a benchmark that the majority of care workers are failing to meet.
The Wage Floor Squeeze
One of the most concerning findings for care providers is the growing proportion of staff clustered at the very bottom of the pay scale. Some 26% of care workers were paid within 10 pence of the NLW in December 2025, up from 22% in March 2025.
This “wage floor” effect — a well-documented consequence of rapid NLW increases — compresses pay structures and makes it increasingly difficult for providers to reward experience or seniority.
The data tells a stark story on experience pay: workers with five or more years in the sector earn just 10 pence per hour more on average than those new to the role. A decade ago, that gap was between 26 and 37 pence. The report describes this as an ongoing challenge, with the narrowing differential making it harder to retain experienced staff and undermining career progression.
The differential between care workers and senior care workers has also contracted sharply. Senior care workers now earn just 6% more than care workers, down from 11% in March 2017 — a trend that risks undermining the incentive to take on greater responsibility.
April 2026 NLW Increase: A Seismic Impact
The report’s most immediate warning for residential and nursing home operators concerns the NLW rise due on 1 April 2026, when the mandatory rate will increase from £12.21 to £12.71 per hour. As at December 2025, 48% of all independent sector workers — approximately 640,000 filled posts — were being paid below this forthcoming rate. For care workers specifically, the figure rises to 55%, representing around 495,000 posts.
Critically, 90% of independent sector care providers were paying at least some of their workforce below the April 2026 rate. The report notes that providers already paying above the new threshold may also face indirect cost pressures if they wish to maintain meaningful pay differentials across their workforce.
This comes on top of the increase in employer National Insurance Contributions that took effect in April 2025, which raised the rate from 13.8% to 15.05% and lowered the Secondary Threshold to £5,000, further adding to staffing costs for care businesses operating on tight commissioning-funded margins.
Competing With Other Low-Pay Sectors
The report places social care pay in the context of the broader low-pay economy. Median care worker pay of £12.60 per hour is just 19 pence above kitchen and catering assistants, and only 9 pence above Band 2 NHS healthcare assistants. Care workers are also paid less per hour than cleaners and retail assistants, highlighting the extent to which the sector struggles to compete for staff in the local labour market.
The Low Pay Commission has classified social care as a low-paying sector every year since 1998, and the latest report confirms that designation remains firmly in place.
Fair Pay Agreement: Hope on the Horizon?
The report acknowledges significant policy developments that could reshape the landscape. The Employment Rights Act, which became law in December 2025, introduces guaranteed hours for zero-hours contract workers and day-one Statutory Sick Pay entitlement — both with direct implications for care providers’ cost base.
More significantly, the Government has committed £500 million to a Fair Pay Agreement (FPA) for adult social care workers, with the Adult Social Care Negotiating Body due to be established through regulations in 2026 and the first FPA expected to come into force in 2028. Skills for Care’s Chief Executive, Professor Oonagh Smyth CBE, has welcomed the move, describing it as “a significant step forward,” while cautioning that pay improvements must be supported by consistent commissioning standards and funding if providers are not to be squeezed unsustainably.
“The care provider market is extremely fragile,” the report warns, “so increasing costs in one area has the potential to create issues elsewhere.”
Rachael Dodgson, chief executive of Dimensions, which supports 3,000 adults with learning disabilities and autistic people across England and Wales, said:
“Skills for Care’s latest pay report clearly shows social care finances under extreme strain. The government’s increase in Employers’ National Insurance alone has cost Dimensions around £6 million this financial year – a sum that would have funded round-the-clock support for 28 people in that same time frame.”
“Government must act. Social care needs a fully funded Fair Pay Agreement – far more generous than government has put forward – and a workforce plan which prioritises career progression for adult social care.”
“Care and support providers cannot be expected to deliver nationally agreed pay standards without sustainable investment from government. This pay must be channelled through local authorities at rates that reflect the true cost of care.”
“We at Dimensions will continue working with UNISON and others to press government for the long-term funding reform social care urgently needs. If we are serious about valuing skilled frontline professionals, funding must match this ambition.”
