Where does the money go?
Home care prices vary widely — from around £24 an hour at the cheaper end to £40 or more at agencies like ours. The gap is not arbitrary. Here's what the maths actually looks like, what the sector body says care should cost, and what gets sacrificed at the lower price points.
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Two providers can quote very different rates for the same hour of care.
On paper, an hour of home care is an hour of home care. In practice, the cost of delivering that hour reliably, safely, and to good standard is well-defined — and most of the variation in price between providers comes down to which costs are being met properly and which are being squeezed.
The page below works through it in three parts: what the sector body says care actually costs, where each pound goes at Gardiner's, and what providers tend to cut when they need to hit a lower headline rate.
The Homecare Association says safe, legal, sustainable care costs at least
The Homecare Association is the sector's national membership body, representing over 2,200 providers. Each year it publishes a Minimum Price for Homecare: the rate below which providers cannot deliver legally compliant care, properly paid carers, and a financially sustainable business.
The current figure of £34.42 per hour is built up from the National Living Wage (now £12.71), employer National Insurance, pension auto-enrolment, holiday and sick pay, mileage, plus a minimum contribution toward the office staff and systems needed to meet care regulations. It allows for a 5% net profit margin — the level the Association considers the floor for financial sustainability.
Where each pound actually goes.
Most home care providers don't publish their cost structure. Here's ours, in round numbers, for every pound that comes in through fees.
The carer
Carer wages, employer National Insurance, pension contributions, holiday and sick pay. Mileage reimbursement when carers drive between visits. Training, DBS checks, supervision time. The single biggest cost, by some distance — and the one that most directly determines the quality of care delivered.
Running the business
Predominantly office salaries: care managers, schedulers, the registered manager, recruitment, payroll, finance. Care plans, rota systems, out-of-hours cover, regulatory compliance, insurance, the office itself. The infrastructure that keeps care reliable when a carer is off sick at 6am or a hospital discharge needs cover the same day.
Profit
What's left after paying the team and running the business. The Homecare Association considers 5% the minimum for a financially sustainable home care business — the level that lets a provider weather a difficult quarter, invest in training, and keep going. Many smaller agencies operate at 1–3%.
A lower headline rate has to come from somewhere.
Most of the cost of home care is the carer and the office that supports them. So at lower price points, that's where the reductions tend to fall. Three patterns recur:
- 01
Carers are paid very little
Pay sits at or close to the National Living Wage — and once unpaid travel time between visits is taken into account, effective hourly pay can fall below it. Care work is skilled work, but at minimum-wage rates, agencies are competing with retail and hospitality for staff and losing. Turnover runs high, and recruiting good people gets steadily harder.
- 02
The office is genuinely thin
Care managers carry larger caseloads, which means they may not know the client well — or at all — before having to make decisions about their care. Training is at the regulatory minimum or below, recruitment is rushed to fill rotas, supervision is light. Things still run, day to day. It's when something needs sorting out that the gap shows.
- 03
The business is run for efficiency, not for care
Rotas are built around lowest cost to serve rather than best client experience. That looks like fifteen-minute visits, back-to-back schedules with no slack, and whichever carer happens to be free rather than the one a family knows. The maths works on a spreadsheet. It's a different experience in the home.
How our rates relate to all this.
Our weekday hourly rate is £39.50, with higher rates for evenings and weekends. That sits comfortably above the Homecare Association minimum, and it pays for three things.
Carer pay. Our hourly rates sit between 26% and 57% above the National Living Wage. Our carers stay an average of around eight years.
The office. Each of our care managers has more than twenty years' experience — the kind of people who'd typically be the manager at a smaller agency, here as part of a team. Our Head of Care is a registered nurse.
Some deliberate inefficiency. We keep the same small team on each client, and leave slack in rotas so a visit running over doesn't cascade through the rest of the day. It's not the cheapest way to run a care business. It's how you make care feel consistent from the inside.
What people ask us about this.
Is the £34.42 figure widely accepted?
Yes. The Homecare Association is the sector's trade body, with over 2,200 member providers. Their Minimum Price methodology is the most widely-used framework for calculating the true hourly cost of home care in the UK — published annually, used by providers in negotiations with local authorities, and cited in government and parliamentary reports.
The 2026/27 figure was published in January 2026 and takes effect from April 2026, in line with that year's National Living Wage rise. The full methodology and previous years' reports are available on the Homecare Association website.
Aren't some smaller, cheaper agencies still good?
Some are. Quality of care isn't purely a function of headline price — a small, owner-run agency with strong local roots can deliver excellent care at a tight margin, particularly in the short term.
What rarely works long-term is the combination: lower price and well-paid carers, and proper office cover, and low turnover. The maths simply doesn't add up. If a provider is genuinely cheaper, it's worth asking how — the answer will tell you what they've had to compromise on.
How can I tell if a provider is paying carers properly?
A few questions tend to surface the answer:
- How does carer pay compare to the National Living Wage? Pay sitting at or just above the legal minimum is usually a sign that the headline rate has been brought down somewhere it shouldn't have been.
- What's the typical carer tenure? Long tenure is the clearest single signal of how well an agency treats its team.
- What's the minimum visit length? Fifteen-minute visits are a strong indicator of state-funded care commissioned at unsustainable rates.
- Who's in the office, and how experienced are they? The depth of the office team is what determines how a provider responds when something goes wrong — and something always eventually goes wrong.
Does the same logic apply to live-in care?
Yes, with different mechanics. Live-in carers are paid by the day rather than the hour, but the cost structure is similar — carer wages, employer on-costs, training, office support, regulatory cover. The same questions apply at lower price points: where is the saving actually coming from, and what does that mean for the carer doing the work and the family relying on the arrangement?
For more on how live-in care compares to other options, see our live-in vs residential page.
Why publish your own profit margin?
Because the question of where home care money goes matters to the families paying for it, and the sector as a whole is opaque about it. A 5–10% net margin is sustainable rather than generous — the bottom of that range is the floor the trade body recommends, and the top sits well below most service businesses. Publishing it means anyone can see the maths.
Are you regulated, and how can I check?
Yes. Gardiner's Homecare is registered and regulated by the Care Quality Commission. Both our branches are rated Good. Inspection reports are public on the CQC website, and our reviews are independently verified on homecare.co.uk.
Got questions about any of this?
Happy to talk through the maths, or what it would actually cost in your situation. A short phone call is usually enough.
Mon–Fri 7:30am–5pm · Out of hours, leave a message and we’ll call back.
