How Will Increases in Minimum Salaries Affect the Care Sector?

In recent times, the Care Sector has experienced significant changes in minimum salaries due to the Skilled Worker rules and the Health and Care Worker sub-category. These adjustments have sparked discussions on how these changes will affect the industry. 

I recently wrote about the changes to salaries introduced under the Skilled Worker rules, and the Health and Care Worker sub-category. If you haven’t read that I highly recommend you check it out first by clicking on this link above.

To break it down, here are the key points:

• The minimum salary for Health and Care visas is £20,960 per year; and
• The `going rate` is now based on 37.5 hours instead of 39 hours per week

Impact of Increasing Minimum Wages on the Care Sector UK

Based on this figure we can assume that the minimum salary has increased by 2.4%. For some SOC codes this is not correct. Senior Carer workers have a “going rate” in the immigration rules but junior care workers do not. 

To simplify it, junior care workers fall under the shortage occupation code meaning that they can be sponsored, despite the immigration rules not listing them as an eligible SOC code for sponsorship. 

If we assume that the minimum salary of £20,960 is divided over 37.5 hour week, this means that the individual’s hourly rate has increased by (compared to those working under the old rules based on a 39 hour week), this means that their hourly rate has increased by 6.4% per hour. 

It also means that those being sponsored in the UK could being paid an additional 3.2% higher than the minimum wage, meaning that it could be even harder to retain talent in the UK that are settled here. 

It is estimated that vacancies in the Health and Adult Social care sector are 56% than before covid-19. With increasing competition pushing up salaries, it would seem that the Home Office is forcing salaries in the care sector even higher. It is also estimated that the average hourly rate in the care sector was £10.03 in December 2022. 

This means that the minimum salary for a 37.5 hour week will be approximately £10.75 per hour which is 7.18% higher than six months ago, which would correlate with the most recent date on average pay increases. 

There are further pressures on the sector with high energy costs and people not being able to afford high care fees. Age UK estimates that on average a care home will cost £800 per week and nursing care will cost £1,078 per week. 

If the cost of care was to increase by 7.1% costs would increase on average by between £2,953.60 to £3,979.98 per year. The care sector has pressures from consumers not being able to afford higher costs and pressures on salaries and recruitment. 

Effectively, the Home Office increasing salaries is adding to the pressures for the care sector, but it is not the cause of issues for the care sector. The Home Office salary increases are lower than the average salary increases, meaning that it will have a negligible effect on the labour market. 

High inflation, loads of competition for workers pushing up salaries in the care sector and also prohibitively high costs for visas are causing the most issues with the care sector.

In Conclusion

It is evident that the impact of increasing minimum salaries in the Care Sector is a complex issue. While there are potential benefits in attracting and retaining skilled professionals, there are also challenges associated with rising costs for care providers and potential affordability issues for care recipients.

Ultimately, addressing the impacts of increasing minimum salaries in the Care Sector requires a commitment to ongoing dialogue and collaboration, enabling the sector to evolve and thrive in a way that benefits all stakeholders involved.