£500 million for first ever fair pay agreement for care workers
Source: gov.uk (2025-09-29)

Government invests £500 million into first ever fair pay agreement in major milestone for care worker pay.

- Secretary of State for Health and Social Care Wes Streeting announces a major £500 million investment in fair pay agreement for adult care workers across England
- The first of its kind, the agreement will be negotiated by a new body that brings together employers and trade unions to boost pay and conditions for a workforce that has for too long been undervalued and underpaid
- Government announcement follows tireless campaigning from unions and care workers for change
The government today announces a major step in boosting the wages of adult social care workers across England, as a £500 million investment is announced into the first ever fair pay agreement.

A new body to negotiate changes to pay and terms and conditions for care workers will be set up including both employers and trade unions.

The body will aim to improve recruitment and retention, giving staff better recognition for their important work and this initial investment will mean that by 2028, care workers will expect to see a boost in their yearly wages.

The cash injection follows the government’s immediate actions to boost the social care sector, including a £2,000 uplift in the Carers’ Allowance and an increase in the Disabled Facilities Grant to provide 15,000 more home adaptations.

A public consultation to gather views on the design of the fair pay agreement process (https://www.gov.uk/government/consultations/fair-pay-agreement-process-in-adult-social-care) has also been launched today (30 September 2025) by government.

Following this, the Adult Social Care Negotiating Body will be established through regulations in 2026, with the first fair pay agreement coming into force in 2028.

It is supported by other government reforms that will ensure a career in adult social care is respected and rewarded - by backing progression through a universal career structure, funding training and qualifications, and recognising the complex skills care workers bring - so working in care is seen as a profession, not just a job.

Not only will this improve recruitment, but this important first step between workers and employers in the sector will also ensure the delivery of high-quality care, as the government makes headway on its mission to build an NHS that’s fit for the future.

As well as putting more money in pockets for care workers, it is a down payment on higher wages for the future, as establishing collective bargaining in this critical sector means that the workers will have a strong voice for years to come.

The fair pay agreement will be backed by law currently progressing in Parliament through the Employment Rights Bill, and will empower employers and unions to negotiate better terms and conditions.

Baroness Louise Casey is working on the independent commission into adult social care to build cross-party consensus and deliver recommendations on the government commitment to create a national care service.

Today’s announcement follows the Spending Review settlement which saw a 2.6% real terms average annual increase in local government core spending power over the Spending Review period, including £3.4 billion of new grant funding for vital local services. This £500 million forms part of an increase of over £4 billion of additional funding available for adult social care in 2028 to 2029, compared with 2025 to 2026.

The government has also taken steps to boost wages for the lowest paid workers including care workers, with the National Living Wage increasing by 6.7% to £12.21 this April. This increase is expected to benefit around 3 million low paid workers. This represents an increase of £1,400 to the gross annual earnings of a full-time worker on the National Living Wage.

Background information

The confirmed £500 million funding today has been newly allocated from the £4 billion increase in funding available for adult social care in 2028 to 2029 that the Chancellor announced in the Spending Review.

As well as delivering a better deal for care workers, the Adult Social Care Negotiating Body and new Fair Work Agency will work together to crack down on any exploitation occurring within the sector, through helping employers understand statutory duties and implementing effective enforcement.

Following the public consultation, the government aims to lay secondary legislation and stand up the new negotiating body in 2026. They will conduct negotiations in 2027 with enough time to prepare the sector for implementation ahead of 2028 to 2029.