Hundreds of thousands of care workers will get a 4.1% pay rise next April after chancellor Rachel Reeves announced she would increase the national living wage by 50p per hour.
Under the measure, included in the Autumn Budget, the pay floor for workers aged 21 and over will increase from £12.21 to £12.71 per hour.
As of March 2025, when the NLW stood at £11.44 per hour, an estimated 20% of adult care workers in independent sector services in England - around 180,000 staff - were earning that amount (source: Skills for Care), meaning a similar number will likely benefit from next year's rise.
The increase, which is in line with the recommendations of the advisory Low Pay Commission, will also benefit hundreds of thousands of care staff earning just above the NLW.
Announcing the move, Reeves said it would mean that "those on low incomes are properly rewarded for their hard work" (source: The Independent).
For UNISON, general secretary Christina McAnea welcomed the plan, saying: “Many of those whose pay is going up again in April work in our essential services. They’ll spend the extra cash on goods and services where they live, which helps grow local economies."
Providers have struggled to meet recent wage rises
The 4.1% rise is the lowest percentage increase in the national living wage since 2021, with the rate having increased by almost 10% in each of 2023 and 2024 and by 6.7% earlier this year.
Providers have struggled to meet the latest increases due to council fees not keeping up with their rising wage bills, an issue compounded this year by the accompanying rise in employer national insurance contributions (NICs).
According to the Homecare Association, the 2025 rises in the NLW and employer NICs increased their costs by 10%, however, just half of this was covered by councils. It has calculated that providers in England are receiving £2bn less this year than they need to employ staff on the NLW, meet their other costs and make a profit or surplus of 7%.
While next year's rise in the NLW is smaller than those seen in recent years, councils are already reporting pressures on their 2026-27 budgets. The Association of Directors of Adult Social Services (ADASS) found that authorities were projecting having to save £869m next year in order to manage their budgets.
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