FOR NURSING AND RESIDENTIAL CARE HOMES
W W W. T H E C A R E R U K . C O M
WE NOW SUPPLY A WIDE RANGE OF FURNITURE
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Issue 273
Fiscal Drag Will Strip Billions from Care Workers Pay… and Undermine Fair Pay Agreement
New analysis from Care England has revealed how frozen tax thresholds will undermine any pay reforms in Adult Social Care. Freezing Income Tax and National Insurance thresholds until 2031, as announced in the Chancellor’s 2025 Autumn Budget, will remove an estimated £1.4 billion from care workers’ take-home pay before the social care Fair Pay Agreement (FPA) is even implemented, the analysis reveals.
Only £0.5 billion has been allocated to deliver FPA settlements for the social care sector, which will take effect in April 2028. But Care England’s document, Understanding the "Silent Pay Cut", shows that fiscal drag is “significantly” contradicting the purpose of a National Living Wage and is instead operating as a pay cut.
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