Four in five young social care workers have seen their earnings rise to meet the national living wage, despite not being legally entitled to the full amount.
A new study by independent think tank Resolution Foundation has found that since the National Living Wage was introduced in April 83 per cent of those under the age of 25 - the legal minimum to receive NLW - have also received the pay increase.
According to the figures, most social care employers have passed the £7.20 hourly rate onto all staff previously earning less and Resolution Foundation says the improvement in earnings carries “spillover” effects for the wider economy.
The research also found that, despite fears ahead of the NLW’s introduction, there was little evidence of frontline carers’ hours being cut to reduce the impact of higher wage demands.
Laura Gardiner, senior research and policy analyst at Resolution Foundation, said: “It is great news that the National Living Wage has had a large positive impact on pay in social care, giving hundreds of thousands of frontline care workers a pay rise, with no evidence of hours being cut to foot the bill.
“It is encouraging that younger workers have also benefited from the new 25-and-over rate, despite having no legal entitlement to the National Living Wage.
“In fact, across the age range social care employers are clearly doing much more than the bare minimum where pay is concerned, with the average pay rise double what it would have been had bosses just increased pay to the legal wage floor.”
However, the foundation warned that in future the sector could struggle to continue to spread the benefit of the NLW to all employees. By 2020 the extra cost of the NLW is set to reach £2.3 billion, increasing pressure on employers.
Ms Gardinder added: “As the NLW continues to rise to its target value by 2020 we risk reaching a ‘crunch point’ where a lack of funding leaves the care sector unable to continue to spread the benefits of the NLW.
“Our ageing population combined with the prospects of reduced inward migration post-Brexit make it essential that more public funding is available for care providers to attract and retain the care workforce we need.”