New – April 2021 National Living Wage analysis
From April 2021, the National Living Wage (NLW) will increase to £8.91 (a 19p increase from £8.72) and will be available to people aged 23 and above (down from the current age of 25).
Using Adult Social Care Workforce Data Set (ASC-WDS) data, it is estimated that 35% of the adult social care workforce (485,000 workers) are currently paid below the new NLW rates and will therefore directly benefit from this increase. Increasing the pay of these workers to the new NLW rates would increase the wage bill of the sector by £115 million.
The wage bill could increase by more than this if employers also provide pay rises to other workers in order to maintain pay differentials between roles.
2019/20 pay rates
In 2019/2020, when this information was collected, the National Living Wage (NLW) was £8.21. In April 2020, after this information was collected, the NLW increased to £8.72.
In 2019/20, around 640,000 (50%) independent sector adult social care workers were paid below £8.72 and will therefore directly benefit from this increase by an average of £600 per year.
Our analysis has shown that care workers paid at or close to the NLW have benefited the most from increases to the NLW. However, the differential between this group and those at the higher end of the pay scale has reduced.
At the time of writing, the Government has announced that the age threshold for the National Living Wage (currently 25 years) will reduce to 23 years in 2021 and further to 21 years by 2024, benefiting younger workers in the adult social care sector. However, due to the uncertainty caused by COVID-19 in the labour market, future rates for April 2021 and beyond have not been officially announced.
The following information refers to care workers employed in the independent sector in England as at 2019/20 and uses data from the Adult Social Care Workforce Data Set (ASC-WDS).
- The average care worker was 90p per hour better off, in real terms, in March 2020 than they were in September 2012 (an increase of 12%).
- The pay gap between more experienced care workers and those new to the sector has reduced from 29p (4%) in September 2012 to 12p (1%) in March 2020.
- Pay differentials between social care and other low paying occupations (defined by the low pay commission) have also been decreasing. Notably, sales and retail assistants earned 13 pence per hour less than care workers in 2012/13 but in 2019/20, they earned 24 pence per hour more on average than care workers.
- The proportion of care workers being paid on the wage floor has increased since the introduction of the NLW, rising from 16% of care workers being paid the minimum rate in March 2016 to 21% in March 2020.
- Around a 30% of care workers were paid on or above the Real Living Wage (set by the Living Wage Foundation) in March 2020.
Around 85% of adult social care organisations in the independent sector in March 2020 were paying at least some of their workers below the next mandatory NLW (£8.72) and will have therefore been directly affected by its introduction.
- Access pay information in chapter five of the 'State of' report below.
- For data at a regional and local level please access the visualisations on the regional and local sections of this website.
- Access specific pay information in the workforce estimates below.
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