Government officials have developed proposals for a mandatory social care contribution of 1.8% on earnings above £6,240 for workers over 34, paid into a fund to cover care costs later in life — a proposal, not policy, with no immediate effect on employer costs.
- The charge would apply to workers over 34, at 1.8% of earnings above £6,240.
- An employee on £50,000 would pay around £788 a year; someone on £80,000 around £1,327.
- The system is estimated to cost £18bn a year; wealthier older people could be asked to fund 10–45% of their own care depending on assets.
- A public consultation on the proposal is expected to conclude in April 2027.
What's actually being proposed
As drafted, this is a mandatory contribution paid by workers over the age of 34, invested on their behalf and drawn on when they eventually need care in old age — closer to a private fund structure than general taxation. It sits alongside a nine-month national conversation on social care funding, and remains a proposal rather than confirmed policy.
Why an employer should still pay attention
Even though the proposal as it stands doesn't change employer costs directly, it changes the conversation around pay. A salary that already feels tight to a candidate gets tighter if a further 1.8% is coming out of it, and pay expectations tend to move before any legislation actually does. For an employer, the number that matters right now is still what a hire costs all-in today — employer National Insurance and pension contributions included — because that's the baseline any future change gets measured against.
What to check now
Rather than trying to price in a proposal that could change significantly before the consultation concludes in April 2027, the more useful exercise for an employer is establishing exactly what a given salary costs today, so that any future shift in candidate pay expectations has a clear baseline to be measured against.
Frequently asked questions
Is the 1.8% social care contribution confirmed government policy?
No. It's a proposal developed by government officials, sitting within a wider consultation on social care funding expected to conclude in April 2027.
Would employers pay the proposed social care contribution?
As currently drafted, the charge falls on employees over 34, not employers — though changes to take-home pay can still affect what candidates expect to be paid.
How much would the proposed contribution cost an employee?
On the reported figures, an employee on £50,000 would pay around £788 a year, and someone on £80,000 around £1,327 a year.