National insurance hikes to cost care home group £380k extra a year

Care home bosses have warned that the £600 million for social care announced in the budget ‘won’t touch the sides’, ITV News Social Affairs Correspondent Sarah Corker reports
The manager of a group of nine care homes in South Yorkshire has said the changes to employers’ national insurance contributions announced in the Budget will cost them £380,000 a year.
Claire Rintoul, manager of Sheffcare, a non-profit organisation caring for elderly and vulnerable people across Sheffield, told ITV News she “felt sick” when she heard the chancellor’s announcement.
“This wasn’t budgeted for, it wasn’t planned, it was completely out of the blue. We didn’t see £380,000 coming,” she said.
“The needs of our residents are getting higher and we need more staff if anything. It’s really hard to think, where is the money going to come from? What are we going to have to cut?” she added.
Claire Rintoul, CEO of Sheffcare, said the care industry was already struggling well before Wednesday’s Budget
Chancellor Rachel Reeves said the rise in employers’ National Insurance contributions was a tough choice but the right one in order to invest in public services.
In April 2025, NI contributions are set to rise from 13.8% to 15%, while the point at which businesses start paying the tax on salaries will be lowered from £9,100 to £5,000.
Care home bosses have warned that the £600 million for social care announced in the budget “won’t touch the sides” with much of it being swallowed up by employer NICs increases and a 6.7% rise in the National Living Wage also set to come in next year.
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Mike Padgham, chair of The Independent Care Group (ICG), warned that these measures will “heap pressure on providers” and would make it harder to provide care to older, vulnerable and disabled adults.
He estimated that there are currently two million people across the UK who currently can’t get the care they need, a number that is likely to grow.
“The £600 million on social care is welcome but by the time it is distributed to 152 local authorities and shared with children’s services it will have little or no impact,” he told ITV News.
Mr Padgham added that the rising tax and wages bills would cost his group of five care homes in North Yorkshire an extra £360,000 a year.
While the chancellor pledged billions of pounds of investment for the NHS, social care was barely mentioned in her speech, to the dismay of those working in the sector.
Care England, which represents independent adult care providers, warned that without the financial support needed “the social care sector is in unprecedented danger” with the closure of services that are no longer viable.
Professor Martin Green, OBE, Chief Executive of Care England, said: “When we see £22.6 billion directed towards the NHS, it’s disheartening that social care once again receives only a fraction of the support it needs, despite its critical role in easing NHS pressures.”
The £600 million announced in the Budget for the sector, shared between adult social care and children’s services, is a “drop in the ocean”, he added.
A government spokesperson told ITV News: “We know there is more to do to tackle the significant challenges facing social care, and we will work closely with the sector to build a National Care Service based on clear, consistent standards that will improve the quality of care across the country.
“We have taken a critical step forward by introducing legislation that will establish the first ever Fair Pay Agreement for care professionals, and the Chancellor announced at least £600 million of new social care grant funding, which is part of a wider package to bolster support for councils.
“We are also increasing the Carer’s Allowance earnings threshold, giving unpaid carers the opportunity to earn more and still receive the government support they deserve.”
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