Over half of care workers are being paid below the National Living Wage 

Care England has recently issued an urgent call to action regarding the financial challenges facing the adult social care sector, as outlined in the latest Skills for Care Report. They highlighted that prior to 1 April 2025, over half of care workers in the independent sector earned below the new mandatory National Living Wage due to take effect on that date. 

As all care sector employers will be aware, from 1 April 2025, the National Living Wage rose to £12.21 per hour for workers aged 21 and over, representing a 6.7% increase from the previous rate of £11.44. This increase occurred in the context of a recent House of Commons decision to reject the House of Lords’ proposed amendment to the legislation, which would have exempted adult social care providers from the increase in employer National Insurance Contributions.  

As a result of the latest increase in the National Living Wage, we anticipate that the adult social care sector will face considerable financial challenges. Employers must increase staff wages to comply with the change, while also striving to remain competitive with other industries and providing meaningful pay progression for senior workers. This may result in significant recruitment and retention challenges across the sector. 

Employers in the adult social care sector must exercise caution in addressing these changes. The additional financial burden could lead to instances of non-compliance with minimum wage laws, exposing employers to legal risks, including significant penalties and reputational damage.  

To mitigate the financial impact, employers may need to consider implementing cost-saving strategies, such as restructuring roles or scaling back non-essential services. However, these measures carry the risk of adversely affecting the quality of care provided, highlighting the need for a balanced approach that aligns with employment law obligations while safeguarding service standards.