The three biggest threats to adult social care in 2026

The three biggest threats to adult social care in England in 2026 are a workforce with no new source of overseas recruits, council budgets that a rewritten funding formula has not repaired, and a reform timetable that keeps the sector waiting until at least summer 2027. The first is new. The other two are the threats our panel named in January 2024, in a worse state than they were then.

This is the third edition of our annual assessment. The 2024 edition drew on interviews with Jon Glasby, Richard Humphries and Martin Knapp. The 2025 edition scored their predictions against the data. This one uses the latest Home Office, Skills for Care, Insolvency Service, NHS England and Ministry of Housing, Communities and Local Government (MHCLG) releases, most of them published between June and September 2026.

2026 in numbers

• 19 Health and Care Worker visas were granted to people in caring roles in the first half of 2026, against 2,836 in the first half of 2025.
• 36 councils have been given exceptional financial support for 2026/27, worth £1.51bn. 33 of them are responsible for adult social care, more than one in five of England's 153 social care authorities.
• 63 care companies serving older and disabled people became insolvent in England and Wales between January and August 2026, up from 36 in the same months of 2025.
• 48% of care workers in the independent sector, about 640,000 posts, were paid less in December 2025 than the £12.71 National Living Wage that took effect in April 2026.
• An average of 13,833 patients a day were in English hospitals in August 2026 after they no longer needed to be there, 10% more than a year earlier.

Threat one: a workforce with no new supply line

Overseas recruitment of care workers has, in effect, stopped. The route closed to new overseas applicants on 22 July 2025. Home Office data shows 21 visas granted to people in caring personal services in the last quarter of 2025, 9 in the first quarter of 2026 and 10 in the second. Skills for Care estimates that 2,000 international recruits started care roles between April and June 2026, against 7,500 in the same quarter of 2025. In 2025/26, 95% of international recruits were people already in the UK on dependant, family or student visas.

On the headline measure the sector looks healthier than it has for a decade. Skills for Care's tracker puts the independent-sector vacancy rate at 6.1% in August 2026, and ADASS reported in July that recruitment pressures had "eased". Three things make that reading dangerous.

The first is where the staff are coming from. The number of care posts filled by British nationals fell by 40,000 in 2025/26 and has fallen by 130,000 since 2020/21. Vacancies are low because people who arrived during the 2022 to 2024 recruitment surge, and their families, are filling the gap. People already in the UK can still switch into care work under a transitional rule, but only until 22 July 2028. The Home Office's earned settlement consultation, closed in February 2026 and still under review, also proposed that workers in roles below degree level, care workers among them, wait 15 years rather than five for settlement. If adopted, that would make the UK a harder place to build a care career for exactly the people now holding the sector up.

The second is pay. Skills for Care puts median care worker pay at £12.60 an hour in December 2025, below the £12.71 wage floor that arrived four months later. In March 2025 the median sat 56p above the National Living Wage. A job that pays the legal minimum, with no premium for experience, struggles to compete with retail and hospitality once the migrant pipeline is gone. The Low Pay Commission's central estimate for April 2027 is £13.18.

The third is that the fix is a long way off. The Fair Pay Agreement created by the Employment Rights Act 2025 will not take effect until April 2028. The negotiating body is due to be set up by the end of 2026 and its independent chair appointed in early 2027. The government has committed £500m to the first agreement in 2028/29. Spread across the sector's 1.24 million full-time-equivalent posts in 2024/25, that is about £400 per full-time worker a year, or roughly 21p an hour. That will narrow the gap with the minimum wage, but it is unlikely to reopen a meaningful premium on its own.

Demand is moving the other way. ONS's 2024-based projections show England's population aged 85 and over rising from 1.48 million in 2024 to 1.76 million in 2030, an increase of 280,000 people, or 19%. Our Care Workforce Mismatch Index found almost no relationship between where young people are claiming unemployment benefits and where care posts sit unfilled. Only 37 of England's 152 upper-tier councils run high on both.

Threat two: a new funding formula on an old shortfall

The 2026/27 local government finance settlement, the first under the government's rewrite of the funding formula and set for three years to 2028/29, raised core spending power in England by 6.1%, or £4.5bn. Councils may raise council tax by up to 3% plus a further 2% adult social care precept in each year. The Social Care Grant and the Market Sustainability and Improvement Fund, worth £5.9bn and £1.05bn in 2025/26, have been folded into general Revenue Support Grant. MHCLG estimates that £1,645m more is available for adult social care in 2026/27 than in 2025/26. None of it is ring-fenced.

Emergency support kept growing anyway. MHCLG has agreed exceptional financial support for 36 councils for 2026/27, worth £1.51bn by our count. In 2023/24 there were 8. Of the 36, 33 run adult social care. East Sussex, a two-tier county council, joined the list this year with £70m. Shropshire's support for 2026/27 is £121m on top of £71.4m for 2025/26.

The ADASS spring survey of 2026 puts the adult social care overspend at £715m for 2025/26, and says councils planned £909m of savings in 2026/27, 3.5% of their net care budgets. Only 15% of directors said they were fully confident of meeting their duty to keep local care markets sustainable, and 24% were fully confident that their budget would meet the needs of people over 65.

Providers are absorbing the gap, and a growing number are failing. Our cost model shows the pay and employer National Insurance bill for one full-time care worker on the wage floor rising by another £1,121 in 2026/27, to £27,752, after a £2,500 rise the year before. Care England estimates that the frozen National Insurance threshold alone adds £41m to provider costs in 2026/27, and £176m a year by 2029/30. Meanwhile the average council homecare rate reported by ADASS, £25.05 an hour, sits 27.2% below the Homecare Association's £34.42 Minimum Price for Homecare. That gap was 20.5% two years ago.

The insolvency data for 2026 is the clearest warning in this edition:

With four months still to count, homecare-type insolvencies in 2026 have already passed the highest full-year total since the series began. ADASS found that 66% of councils saw providers close, stop trading or hand back contracts in the six months to May 2026, up from 56% a year earlier. These are company insolvencies only, so they leave out sole traders and providers that close voluntarily. The true number of services lost is higher.

Threat three: the price of waiting for reform

On 29 July 2026 Prime Minister Andy Burnham announced that the Casey Commission's two phases would be merged into one final report, brought forward to summer 2027. That is a year sooner than the original 2028 date for funding recommendations, and it still leaves the rest of 2026 and much of 2027 without a funding settlement. The Fair Pay Agreement follows in 2028.

The cost of waiting is already visible in the NHS. NHS England's discharge data shows an average of 13,833 patients a day in August 2026 who no longer met the criteria to stay in an acute bed, up from 12,535 in August 2025. That came to 428,815 delayed bed days in a single month, which NHS England values at £241m using its £562 cost per bed day. The data is unvalidated management information, and not every delay is down to social care. Even so, the direction matters. Councils' care spending has held at 19.3% of their service budgets for three years running while the queue in hospital grows. The system is paying for care in the most expensive place it can buy it.

Burnham wrote the last National Care Service white paper, as Health Secretary in 2010 (see two MPs' verdict on what his premiership means for social care). A faster commission timetable is a better signal than the sector has had since 2021. It remains a timetable.

What to watch for the rest of 2026

• Skills for Care's annual state of the sector report on 14 October, the first full picture of the workforce since the visa route closed.
• The Low Pay Commission's recommendation for the April 2027 National Living Wage, due in October.
• The provisional local government finance settlement for 2027/28, expected in December.
• The Home Office's response to the earned settlement consultation, and whether care workers are held to the 15-year path.
• The launch of the Adult Social Care Negotiating Body, due by the end of the year.

How we did this

Visa figures are Home Office main-applicant grants for occupation group 613, caring personal services, from the year ending June 2026 release. Exceptional financial support totals are our sums of MHCLG's 2026/27 table for that year only. The cost model applies HMRC's 2026/27 employer National Insurance rate and threshold to a National Living Wage salary at 1,950 hours a year, before pension and Employment Allowance. The Fair Pay Agreement estimate divides the £500m commitment by Skills for Care's 2024/25 full-time-equivalent count. Insolvency figures are provisional and cover England and Wales. The homecare price gap compares two differently constructed series and should be read as a trend.