Care business pricing, fee uplifts and growth
You are busy, and it is still not making money.
Full rotas, referrals coming in, everybody working flat out — and nothing left at the end of the month. That is almost never a hard work problem. It is a price problem, a cost problem or a capacity problem, and the three have very different answers.
Free calculator: what does an hour of your care really cost? →Two minutes · no email address
Before you cut anything
Where the money actually goes
Six places. Most providers can name two of them, and the four they cannot name are usually where the money is.
The rate
A price set years ago and never revisited
Rates agreed when wages, insurance and fuel were different, carried forward because nobody wanted the conversation. Every year you do not have it, the gap widens and the argument gets harder to win.
On-costs
The hourly cost that is not the hourly wage
National Insurance, pension, holiday pay, sickness, training time, travel, supervision. Providers price against the wage and then wonder where the margin went — it went here, and it is entirely predictable.
Agency
Paying twice for the same shift
Agency is a symptom, not a cost line. It is what recruitment failure, rota design and retention look like on a bank statement, and it is usually cheaper to fix the cause than to negotiate the rate.
Voids
The empty bed and the unfilled hour
Fixed costs do not fall when occupancy does. In a residential setting a single empty place can be the whole difference between a surplus and a loss, and most providers have never worked out where their break-even actually sits.
Overheads
Costs that grew quietly and were never questioned
Insurance, utilities, software, professional fees, vehicles, a head office that was right for the service you used to be. Renewed on autopilot, year after year, at whatever was offered.
Funding
Money you are entitled to and have not asked for
Uplifts, funded packages, banding reviews, grants, discounts and rate negotiations with the local authority. Commissioners rarely volunteer these. They are, however, frequently agreed when somebody asks properly.
Free · No email address · Current rates
What does an hour of your care actually cost?
Busy and still not making money is almost never a volume problem. Put your own figures in and see the gap between what an hour costs you and what you are paid for it.
Built on the rates in force now. Reviewed each April, and dated so you can see when.
Current at September 2026. England.
Illustrative starting figures — current at October 2026. Replace with your own.
Where the money goes
The 2026-27 numbers behind the defaults
Current statutory figures, so nobody is costing on last year's arithmetic.
| Input | Current figure | Why it matters |
|---|---|---|
| National Living Wage, 21 and over | £12.71 | From April 2026, up 4.1% from £12.21 |
| 18 to 20 rate | £10.85 | Apprentice and under-18 rate £8.00 |
| Employer National Insurance | 15% | Above a secondary threshold of just £5,000 a year — which is why NI now bites on nearly every part-time care worker, and why 2025-26 was a step change rather than an increase |
| Employment Allowance | £10,500 | Claimable against the first slice of employer NI, eligibility permitting |
| Pension, employer minimum | 3% | On qualifying earnings of £6,240 to £50,270 — so the effective cost on a part-time worker is well below 3% of gross pay |
| Holiday accrual | 12.07% | 5.6 weeks over 46.4 working weeks. For irregular-hours workers this is the statutory method, not a convention |
| Mileage, HMRC approved | 45p | To 10,000 miles, then 25p |
| Under-21 and apprentice NI | 0% | Employer NI relief up to £50,270 — genuinely material on a young workforce, and routinely missed |
The two levers that actually move your cost
Everything else is rounding by comparison.
| Lever | Model default | What moving it does |
|---|---|---|
| Contact hours per worker | 20 / week | The single biggest lever. Employer NI, pension, training and management all spread across contact hours — a worker doing 28 hours carries the same fixed burden as one doing 14, at two-thirds of the cost per hour. Rota density is a margin decision disguised as a scheduling one. |
| Travel time per visit | 8.09 min | Paid travel plus mileage is around 15% of the total price in the sector model. Tight geography is worth more than a fee uplift, and it is the one thing you control without asking anyone's permission. |
| Sickness and absence | 4.2% | Feeds every downstream component, because holiday and NI are calculated on the grossed-up figure |
| Business overhead | £7.33 / hr | About 23% of the sector model — management, back office, recruitment, IT, insurance, regulatory fees, premises |
| Residential weekly rate | £1,298 per bed | The UK self-funder average for residential care, from carehome.co.uk fee data dated 9 September 2025. Nursing averages £1,535; the regional range runs £1,112 in the North East to £1,548 in London. A starting point, not our view of what you should charge. |
| Non-care costs uplift | 67% | Our assumption, not a published figure. Catering, domestics, laundry, maintenance, management and property, carried as a percentage of front-line care pay. A children’s home at near 1:1 staffing would sit far lower; this is set for an adult home, and it is the first thing to change if your cost base differs. |
Why staff leave, in one line
Relevant here because turnover is a cost, and it sits inside the recruitment and training lines above.
Median care worker pay is £12.60, sitting a few pence above the wage floor, and 26% of care workers are within 10p of it. A care worker with five or more years' experience earns about 10p an hour more than a new starter — down from 33p a decade ago. Sector turnover runs at 23.6%, and homecare higher still at around 26%. Experience is paid almost nothing, which is the whole explanation, and no retention initiative survives contact with it. Overseas recruitment is no longer the release valve it was: the care worker route closed to new applicants from abroad in July 2025.
What we actually do about it
In this order, because fixing the cost base before you have fixed the price just makes a badly priced service cheaper to run.
01
Read the real numbers
Costings, unit economics and a proper look at where the money goes — by service, by contract, sometimes by individual package. Most providers have never seen this.
02
Fix the price
Rate reviews, uplift cases, banding and the conversation with the commissioner — evidenced, so it is a negotiation about facts rather than about how you are feeling.
03
Take out the cost you should not be paying
Insurance, utilities, agency dependency, contracts renewed on autopilot. This is often the fastest money on the table and the least painful to collect.
04
Fund the next step
Projections, funding routes, invoice discounting, lenders and the case that persuades them — then the extension, the variation or the acquisition it pays for.
Growth that does not make money is just more risk.
More hours, more beds and more staff will magnify whatever your margin already is. If it is negative, scale makes it worse — which is why we look at the economics before we look at the expansion.
What that has looked like
Names withheld, because most of this is nobody else's business.
Overheads
£22,000 off an insurance premium
A provider paying around £52,000 a year. One ten-minute call with them and their insurer, and the premium came down by twenty-two thousand pounds — money that had been leaving the business every year for no reason at all.
Funding
Money the local authority had not offered
Funding and discounts negotiated with the local authority for a provider who had assumed the rate was the rate. Commissioners very rarely volunteer this. They do agree it when somebody puts the case properly.
Capacity
Room to grow, without starting again
Registrations varied, properties extended, buildings acquired and designed around the service they had to hold. Growing inside an existing registration is almost always faster and cheaper than a new one.
Not ready to talk yet
Three other ways to look at it
Plenty of people are not ready for a phone call, and that is fine. Nothing here needs one.
The store
Costing and rate review tools
Editable models for pricing a package, building an uplift case and working out what a shift actually costs you. Delivered immediately.
Browse the storeResources
Pricing, uplifts and commissioning
How rates are actually set, what a commissioner can and cannot agree to, and what a successful uplift case has in it.
Read the guidesThe other route
Grow by buying, not by building
Sometimes the cheapest capacity is somebody else's, already registered and already running. Worth knowing before you extend.
See how buying worksGrowth work
Two pieces that sit under this, each available on its own.
Marketing and growth strategy
Occupancy, referral routes and reputation, for a market where the buyer is often a commissioner rather than a family. Not generic marketing with care words in it.
Finance and funding coordination
Structuring the funding case and coordinating the people who provide it. The routes available are worth understanding before you approach anyone.
Bring us your numbers. We will tell you where the money is.
Thirty minutes, no charge, no obligation. You do not need management accounts or a spreadsheet — a rough idea of your rates, your hours and your staffing is enough to have a useful conversation.
Text or WhatsApp
07426 919823If it is easier to write it down than say it out loud, send a message.