Briefing: Pay in the Adult Social Care Sector in England

Context: 

This briefing summarises key findings from the 2025 pay analysis produced by Skills for Care on adult social care workforce pay in England. It uses independent sector pay data up to December 2025 to examine trends alongside statutory wage changes.  

The analysis takes place against a backdrop of policy change and increasing cost pressures: 

• In April 2025, the National Living Wage (NLW) rose from £11.44 to £12.21 for workers aged 21 and over, while employer costs also rose following changes to National Insurance Contributions (NICs).  

• The government has also announced plans to introduce sector-wide minimum payment standards through Fair Pay Agreements (FPAs), with the first agreement for the ASC sector expected by 2028. 

This is occurring alongside significant long-standing workforce pressures in the sector, including high vacancy rates and projections that the workforce will need to grow significantly. 

Skills For Care Chief Executive, Oonagh Smyth, states in the report that the sector may require almost 470,000 additional posts by 2040 to meet rising demand associated with population ageing.  

Key findings: 

Current levels of pay and trends 

Pay levels and distributions 

The report shows that median hourly pay for care workers in the independent sector reach £12.60 in December 2025. Pay remains closely clustered around the NLW, with 26% of care workers earning within 10 pence of the statutory minimum. At the upper end of distribution, the top 10% of earners received £13.91 per hour, while the bottom 10% earned £12.21. 

Pay varies regionally. The highest median hourly rates were recorded in London (£13.00) and the Southwest (£12.80), while the lowest were in the West Midlands (£12.45) and East Midlands (£12.50). 

Trends over time and real pay 

Over time, pay has increased significantly in nominal and real terms. Median hourly pay rose from £7.50 in March 2017 to £12.60 in December 2025, an increase of 68%. In real terms, this represents an increase of £2.38 per hour, or 23%, compared to 2017 levels. Between March and December 2025, however, median pay increased by 5.0% (60 pence). Over the same period, inflation was 2.8%, resulting in real pay growth of 2.1%, equivalent to around 26 pence per hour.  

Historically, care worker pay has tended to increase at a similar rate to the NLW. Between 2021 and 2022 care worker pay grew by 5.4%, exceeding the 2.2% increase in the NLW during a period of high vacancy rates. In more recent years, pay increased have more closely tracked changes in the NLW. However, between March and December 2025, the NLW increased by 6.7%, while median care worker pay rose by 5.0%, representing the largest gap observed since 2019-20. 

In real terms, wages have increased overall between 2017 and 2025. Inflation peaked at 8.8% between 2022 and 2023, before falling to 3.6% between March and December 2025. The largest real terms pay increase was recorded between March 2024 and March 2025, at 5.5%. Real pay continued to increase modestly by 2.1% between March and December 2025. 

 

Side effects of the increasing wage floor

Pay compression and structural constraints are limiting workforce progress 

While average hourly pay has increased in nominal terms, much of this reflects uprating of the NLW rather than improvements in pay structures. A significant proportion of the workforce remains paid at or just above the minimum wage, reinforcing wage compression across the sector.  

Pay differentials between roles remain narrow. Gaps between care workers and managerial roles do not consistently reflect differences in responsibility or complexity. This weakens incentives for progression and contributes to ongoing retention challenges. 

Real pay and labour market competitiveness 

Although real term pay has improved slightly, gains remain modest. Where pay has not kept pace with inflation, workers continue to experience pressure on living standards despite headline increases. Even when real pay is positive, it is unlikely to significantly improve recruitment competitiveness. As a result, care roles remain vulnerable to competition from retail and hospitality, as well as entry-level NHS roles, particularly in tight labour markets. 

Regional constraints on pay 

Regional variation is shaped by how the nationally set minimum wage and locally set fee rates interact. In lower-funded local authority areas, providers have limited headroom to increase pay or differentiate between roles, exacerbating labour market pressures where the cost of living is continuing to rise. 

Provider cost pressures and funding misalignment 

For providers, these challenges are both operational and structural. Pay increases driven by the NLW raise costs automatically, but feel uplifts are not consistently aligned with these pressures. This reduces financial flexibility and limits the ability to reward to experience or specialism, reinforcing instability in recruitment and retention.  

Immigration reforms may further compound these pressures by restricting the sector’s access to overseas workers – at a time when domestic pay levels remain relatively uncompetitive.  

Impact of the 2026 National Living Wage increase 

Scale of workforce impact 

From April 2026, the NLW will increase to £12.71 for workers aged 21 and over. Based on the December 2025 pay data, around 48% of the independent sector workforce, including 55% of care workers, currently earn below this level and will therefore require a pay increase. This is expected to affect 640,000 filled posts across the sector, including around 495,000 care worker roles. 

Wider pay pressures 

The impact is likely to extend beyond those directly affected. This is because, again, providers may need to increase pay for staff already earning about the new threshold to maintain differentials between roles and preserve progression pathways. There will also be pressure to raise wages to remain competitive.  

Interaction with existing cost pressures 

This increase will also have to battle with the wider cost pressures experienced by the sector, such as the rise in NICs in April 2025. While changes to the Employment Allowance may mitigate some of the impact for smaller employers, the overall effect is a significant increase in workforce costs across the sector. 

 

Conclusion: 

The evidence from the report shows that while pay in adult social care has increased in both nominal and real terms, progress remains limited and uneven. Pay growth in the sector continues to be driven largely by statutory minimum wages increases rather than meaningful structural improvements in funding or workforce policy.  

As a result, a growing proportion of the social care workforce remains clustered around the minimum wage, with limited differentiation between roles and constrained opportunities for career progression.  

At the same time, providers must contend with rising cost pressures from multiple sources including higher NICs and increased costs nationwide. Crucially, these funding pressures are not matched by local authority fee uplifts. This creates an uneven balance between the cost of delivering care and the funding available, therefore limiting the ability of providers to invest in their workforce and make it sustainable.  

Without a more aligned funding and commissioning approach, the sector is likely to face continued challenges in recruitment and retention, ultimately affecting the quality and availability of service delivery.