Experienced care workers earn 4p per hour more than new staff, reveals Skills for Care

Experienced care workers were earning just 4p per hour more on average than newcomers to the sector as of December 2024, according to new Skills for Care data.

This is the smallest pay gap between independent sector care workers with five or more years’ experience and those with those less than a year’s service yet recorded in a data series dating back to 2016.

Then, experienced care workers earned 33p per hour (4.4%) more on average than newcomers, but the gap has fallen significantly since, dropping from 10p to 4p per hour from March to December 2024.

Shrinking pay gap between senior care workers and junior colleagues

Skills for Care’s latest report on independent sector pay also showed that the differential between care worker and senior care worker salaries had reached its lowest level yet recorded – 6%, down from 8% in March 2024 and a high of 11% in March 2017.

Median pay for senior care workers stood at £12.75 per hour in December 2024, compared with £12.00 per hour for care workers, said the report.

The squeeze in pay progression appears to have been driven by the impact of growth in the national living wage (NLW), now the wage floor for those aged 21 and over, on a low-paying sector such as adult social care. Since the NLW’s introduction in 2016, real-terms median pay has grown by 26.2% among the bottom tenth of independent sector earners and by just 14.1% among the top tenth.

Providers’ challenge in meeting living wage rises

The NLW has increased sharply over the past two years, from £9.50 to £10.42 per hour in April 2023, a rise of 9.7%, and then to £11.44 last April (9.8%). This has meant that independent care workers have received average real-terms pay rises of 5.4% and 7%, respectively, in each of the past two years, said Skills for Care.

However, it added that some employers had reported that keeping up with changes in the NLW had been challenging, alongside their other business costs.

This is likely to become more challenging still next month, when the NLW grows by a further 6.7%, to £12.21 per hour, and employers must also meet the costs of significant increases to their national insurance contributions (NICs).

Skills for Care found that 58% of independent sector adult social care workers – about 780,000 staff – were earning less than the forthcoming NLW (£12.21 per hour) as of December 2024 – meaning they would benefit from next month’s rise. This includes about 575,000 care workers.

Much of the rest of the workforce is likely to receive a pay rise too because of the need to maintain pay differentials as far as possible.

Costs of NLW and national insurance hikes

Think-tank the Nuffield Trust has calculated that the rises in the NLW and NICs combined will cost independent sector providers an additional £2.8bn in 2025-26, with councils expected to fund £2bn of this to cover the services that they commission.

However, dedicated adult social care funding for councils in England is due to rise by approximately £1.2bn in 2025-26.

“Many councils cannot cover the rise in employment costs and we are worried this will increase the risk of non-compliance with the minimum wage,” said Homecare Association chief executive Jane Townson, in response to the Skills for Care figures.

Townson criticised the government’s decision last week to overturn a House of Lords vote to exempt adult social care providers from the NICs rise.

‘A direct threat to the quality of care’

For Care England, which represents independent sector providers, chief executive Martin Green said: “Care providers are caught between rising wage costs and insufficient money to fund them. Many are already struggling to recruit and retain staff, and with further financial pressures, the situation is only going to worsen.

“This is not just a problem for the providers themselves – it is a direct threat to the quality of care that millions rely on”.