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The costs and benefits of paying all the lowest-paid care home workers in the UK the Living Wage

This research investigated earnings below the Living Wage for staff in care homes for older people, what the costs and benefits might be, and how this pay increase could be funded. The research also explored the implications of the new National Living Wage and reductions to in-work benefits.

Written by:
Hilary Ingham, Sally-Marie Bamford and Geraint Johnes
Date published:

The research found that:

  • The estimated annual wage cost of paying the LW to all care home staff in 2014 is £830 million for the UK, increasing to almost £1 billion when National Insurance and pension contributions are factored in.
  • Paying higher wages reduces the need for in-work benefits, conservatively estimated at £19 per week per household in 2014.
  • The new National Living Wage announced in the Summer 2015 budget will affect at least 50% of care home workers. Including National Insurance and pension contributions, it would cost £387 million per year.