Are Rising National Insurance Costs Putting Quality Care at Risk?

A Wake-Up Call for the Sector 

If you’re leading the finances or operations of a hospice or care home, you’ve probably already felt the tightening on budgets. The recent news that at least five Scottish care homes have shut their doors, partly due to a hike in National Insurance, is more than just concerning, it’s a sign of deeper issues that demand attention. 

This isn’t just a Scottish problem. It’s a UK-wide challenge that affects the entire care home ecosystem. So, what can be done? 

The Rising Costs Threatening Care Home Viability 

In October 2024, the employer National Insurance contribution rose from 13.8% to 15%, and the income threshold dropped significantly, from £9,100 to £5,000. What does that actually mean? For some care providers, this change has added close to £900,000 to annual costs. 

Pair that with increased staff costs, inflation, and tighter local authority budgets, and it’s a perfect storm. Many care homes, especially smaller independents, are finding these conditions simply unsustainable. 

What This Means for Finance and Ops Leaders 

If you’re in charge of budgets, procurement, or long-term strategy, the impact of these cost changes can’t be ignored. But while we can’t control government policy, we can control how we respond. 

Here’s where leaders can focus: 

• Know your numbers – in real-time. Delayed financial visibility is risky. 

• Rethink procurement – small overspends quickly add up. 

• Planning – map out “what if” situations before they happen. 

Finding Breathing Room with Smart Systems 

Compleat work with care providers across the UK who are already feeling the pinch. What we’ve seen time and again is that those who digitise their finance and procurement processes gain back some control. Things like real-time budget tracking, AP automation and forecasting tools can help care homes become more prepared for changes like the NI increase.  

Survival of the Fittest  

No one goes into social care to manage spreadsheets. Strong financial processes are what enable your teams to keep doing the work that really matters, caring for people. 

While closures like those in Scotland are worrying, they don’t have to be inevitable. The care providers that will see the other side of these challenges times are the ones who act now: improving visibility, streamlining operations, and embracing digital tools that deliver long-term value. 

Don’t Wait to Take Action 

If your care home hasn’t reviewed its finance and procurement setup recently, now is the time. You may not be able to change the policy environment, but you can change how well you navigate it.