Why Do Care Agency Fees Differ So Much?
Why do different care agencies charge very different prices for similar services? This comprehensive guide explains all the factors that affect UK care agency fees in 2026.
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If you've ever compared care agency quotes, you've probably noticed that prices can vary enormously—sometimes by £5–£10 per hour or more for what seems like the same type of care.
This can be confusing and frustrating, especially if you're trying to budget for a family member's care or understand whether a quote represents fair value. In reality, care agency fees differ for very real reasons, and higher prices don't always mean higher profit—just as lower prices don't always mean better value.
This guide explains why care agency fees vary so much in the UK, what actually goes into the price you're quoted, and how to make informed decisions when comparing different agencies. If you want to compare figures for your situation, you can use our Care Rate Calculator to see typical ranges.
There Is No Fixed Price for Care in the UK
Unlike utilities or regulated services, care agency fees are not fixed or capped nationally. Each agency sets its own pricing based on its costs, staffing model, location, and the type of care it provides.
That means two agencies operating in the same town can charge very different hourly rates—even if both are fully regulated and CQC-rated. One might charge £24 per hour while another charges £32 per hour for essentially similar personal care services.
How UK Care Pricing Compares
| Country | Care Pricing Model |
|---|---|
| UK | Unregulated pricing—agencies set their own rates |
| Scotland | Some local authority caps for funded care |
| Wales | Some capped rates for council-funded services |
| Germany | National fee schedules for certain care categories |
| Netherlands | Regulated pricing with national tariffs |
The UK's market-based approach means greater variation but also more choice—if you understand what drives the differences.
The Eight Factors That Determine Care Agency Fees
Understanding what goes into a care agency's pricing helps you compare quotes fairly. Here are the main factors:
1. Staff Wages and Employment Costs
The largest part of any care agency's fee is carer pay—typically 45–55% of the total charge.
Agencies that:
- Pay higher hourly wages (above National Living Wage)
- Offer guaranteed hours contracts
- Pay for travel time between clients
- Provide enhanced weekend, bank holiday, or night rates
- Offer sick pay above statutory minimums
will almost always charge more per hour.
In 2026, the National Living Wage is £11.44 per hour for workers aged 21+. But agencies paying just the minimum often struggle with recruitment and retention. Many successful agencies pay £12.50–£15.00 per hour to attract reliable staff—and those costs directly affect client fees.
Example calculation:
- Agency A pays carers £11.50/hour → can charge £24/hour
- Agency B pays carers £14.00/hour → needs to charge £28/hour
- Same service, different business models
2. Travel Time and Mileage Costs
Since 2015, HMRC has required that travel time between care visits be paid at minimum wage. However, compliance varies significantly:
How agencies handle travel differently:
| Approach | Impact on Fees |
|---|---|
| Pays travel time + mileage | Higher fees (adds £2–4/hour to costs) |
| Pays mileage only | Moderate fees |
| Includes travel in hourly rate | Can appear cheaper but may have hidden costs |
| Minimal travel payment | Lower fees but may indicate compliance issues |
An agency that properly pays for 20 minutes of travel time between visits adds approximately £3.80/hour to their costs compared to one that doesn't.
3. Visit Length
Short visits are significantly more expensive to deliver per hour than longer ones.
For example, a 30-minute visit still requires:
- Travel time (often 15–30 minutes)
- Scheduling and rota management
- Admin, payroll processing, and documentation
- The same fixed costs as a longer visit
Cost comparison by visit length:
| Visit Duration | Effective Travel Overhead | True Cost Impact |
|---|---|---|
| 30 minutes | High (travel = 50-100% of visit) | +30-50% per hour |
| 1 hour | Medium (travel = 25-50% of visit) | +15-25% per hour |
| 2+ hours | Low (travel = 12-25% of visit) | +5-10% per hour |
This is why agencies offering only short visits may charge higher hourly rates—or why an agency might quote you less if you book longer visit blocks.
4. Location and Regional Variations
Where you live plays a major role in care pricing. The variation across the UK is substantial:
| Region | Typical Hourly Rate (2026) | Primary Cost Driver |
|---|---|---|
| Central London | £32–£42 | High wages, property costs, competition |
| Outer London | £28–£36 | Still elevated wages and costs |
| South East | £26–£34 | High cost of living |
| South West | £24–£30 | Tourism economy raises wages |
| Midlands | £22–£28 | Average costs |
| North of England | £20–£26 | Lower wages, lower living costs |
| Rural areas | £24–£32 | Long travel distances |
| Scotland (cities) | £22–£28 | Comparable to England |
| Wales | £20–£26 | Lower wage competition |
Important: Rural areas can be surprisingly expensive despite lower local wages. Long travel distances between clients significantly increase delivery costs.
5. Type and Complexity of Care
Not all care is the same, and fees reflect this:
Standard personal care (£22–£28/hour):
- Assistance with washing, dressing, toileting
- Meal preparation
- Medication reminders
- Light housework
- Companionship
Complex care (£28–£38/hour):
- Medication administration (not just reminders)
- Moving and handling requiring hoists or two carers
- Catheter, stoma, or PEG care
- Dementia care requiring specialist training
- Palliative or end-of-life care
Specialist care (£32–£45/hour):
- Behavioural support for learning disabilities
- Complex neurological conditions (Parkinson's, MS, MND)
- Ventilator or tracheostomy care
- Acquired brain injury support
Agencies providing higher-risk or specialist care invest more in training, supervision, and insurance—costs that are reflected in their fees.
6. Time of Service
When care is delivered significantly affects pricing:
| Time Period | Typical Premium |
|---|---|
| Daytime weekdays (8am–6pm) | Standard rate |
| Evenings (6pm–10pm) | +5–15% |
| Early mornings (6am–8am) | +5–10% |
| Weekends | +10–25% |
| Bank holidays | +50–100% |
| Overnight (waking) | +25–50% |
| Night sits (sleeping) | Flat rate £80–£150/night |
An agency that charges a flat rate regardless of time may appear cheaper for weekend care but more expensive for weekday daytime visits.
7. Compliance, Training, and Quality Investment
Regulated care agencies must meet strict CQC standards. Behind every care visit are costs including:
- Mandatory training: Care Certificate (40+ hours), moving and handling, medication, safeguarding
- Ongoing training: Condition-specific (dementia, diabetes, end-of-life), refresher courses
- DBS checks: Enhanced criminal records checks (£40+ per carer)
- Recruitment: Advertising, interviews, references (average £1,500–£3,000 per successful hire)
- Supervision: Regular observed practice, competency checks
- On-call management: 24/7 availability for emergencies
- Quality assurance: Audits, spot checks, complaint handling
- CQC registration: Annual fees plus inspection preparation
The difference this makes:
- An agency spending £500/year per carer on training might add £0.50/hour to fees
- An agency doing only minimum required training saves money but may have lower care quality
- Well-trained carers make fewer errors, provide better care, and stay longer
8. Business Model and Overhead Structure
Agencies operate with very different structures:
| Model | Typical Overheads | Impact on Fees |
|---|---|---|
| Large national franchise | High (central fees, branding, systems) | Higher fees, more consistency |
| Regional multi-branch | Medium-high | Moderate-high fees |
| Single local agency | Medium | Average fees |
| Small owner-operated | Low | Can offer competitive rates |
| Introductory agency | Very low (doesn't employ carers) | Lower fees, less support |
Franchise fees alone can add £2–4 per hour to what a care agency needs to charge.
Profit Margins Are Often Smaller Than People Expect
It's a common assumption that higher care fees mean higher profits. In reality, most care agencies operate on relatively tight margins—typically 5–10% net profit.
| Industry | Typical Net Profit Margin |
|---|---|
| Domiciliary care agencies | 5–10% |
| Care homes | 8–15% |
| NHS outsourced services | 2–5% |
| Retail | 3–5% |
| Technology | 15–25% |
Rising wage costs, fuel prices, insurance premiums, and compliance requirements have all increased costs significantly since 2020. Many agencies have raised fees simply to remain viable—not to increase profits.
An agency charging £28/hour might make only £1.50–£2.50 profit per hour after all costs are paid.
Example: Why Two Quotes Can Look Very Different
Let's compare two real-world scenarios for 10 hours per week of personal care:
Agency A: £22 per hour (£220/week)
- Pays carers £11.50/hour (National Living Wage + 6p)
- 30-minute visits only
- Different carer each visit (no continuity guarantee)
- Minimal paid travel time (possible compliance issue)
- Basic training only
- No weekend enhancement (same carer pay)
- High staff turnover
Agency B: £29 per hour (£290/week)
- Pays carers £14.00/hour
- Flexible visit lengths (1 hour minimum)
- Named carer with backup (guaranteed continuity)
- Full travel time and mileage paid
- Comprehensive ongoing training programme
- Weekend premium paid to carers
- Low staff turnover, experienced workforce
The difference: £70/week (£3,640/year)
Agency A looks cheaper, but consider:
- More carers to get used to
- Possible missed or late visits due to staffing issues
- Less experienced, potentially less skilled carers
- May need to provide more family oversight
Agency B costs more but may provide:
- Consistent relationships
- More reliable service
- Better trained carers
- Less stress for family members
The "right" choice depends on individual circumstances, but the cheapest option isn't automatically the best value.
How to Judge Whether a Care Fee Is Reasonable
Rather than focusing only on the hourly rate, ask these questions:
About pricing:
- What exactly is included in this price?
- Are there any additional charges (travel, mileage, bank holiday premiums)?
- What happens if you need to change or cancel a visit?
- How often do fees increase?
About staff:
- Are carers paid for travel time between clients?
- What training do carers receive beyond the minimum?
- How much supervision and support do carers get?
- What's the staff turnover rate?
About service:
- What's the minimum visit length?
- How many different carers will I see?
- Is there continuity, or will carers change frequently?
- What happens if my usual carer is sick?
About quality:
- What's the CQC rating? (Check at cqc.org.uk)
- Can I speak to current clients as references?
- How are complaints handled?
- What quality checks are in place?
A lower hourly rate isn't always better value if it leads to missed visits, high staff turnover, or inadequate training.
Red Flags: When Low Prices Should Concern You
While competitive pricing can be legitimate, some warning signs suggest corners might be being cut:
- Significantly below local average rates (more than 15-20% lower)
- Reluctance to discuss how carers are paid
- No mention of travel time payment
- Very short minimum visits (15 minutes is rarely adequate for personal care)
- No named or regular carer allocated
- No visible office or contact details
- Pressure to sign up immediately
- No mention of CQC registration (check this independently)
- Poor online reviews mentioning missed visits or high turnover
Use the Care Rate Calculator
If you want to see how different factors affect care costs, you can use our Care Rate Calculator to explore typical price ranges based on location, visit length, and care needs.
The calculator helps you understand:
- What carers in your area typically earn
- What agencies typically charge
- How different factors affect the overall cost
- Whether a quote you've received is within normal ranges
Frequently Asked Questions
Why do care agency prices vary so much?
Because agencies have different staffing models, wage costs, travel requirements, training investments, and overheads. Location and complexity of care also play major roles. Two agencies in the same town can legitimately charge £22/hour and £32/hour based on different business models.
Are higher care fees always better?
Not necessarily. Higher fees often reflect better pay and support for carers, more training, and better continuity. But it's important to understand what's included rather than assuming quality automatically follows price. Always check CQC ratings and ask questions.
Is there a maximum care agency charge in the UK?
No. Care agency fees are not nationally capped, and agencies can charge what the market will bear. However, local authority rates (for council-funded care) are typically lower and may be capped in some areas.
Why are short care visits more expensive per hour?
Because travel time, scheduling, and administration costs still apply even for short visits, increasing the effective cost per hour. A 30-minute visit with 20 minutes travel costs almost as much to deliver as a 1-hour visit.
How can I compare care agency quotes fairly?
Look beyond the headline hourly rate. Ask what's included (travel, mileage, bank holiday premiums), what training carers receive, how many different carers you'll see, and what the cancellation policy is. The cheapest quote isn't always the best value.
Should I choose a local agency or a national franchise?
Both can provide excellent care. National franchises often have established systems, branding, and backup resources. Local agencies may offer more personal service and local knowledge. Check CQC ratings and reviews for either type.
Last updated: January 2026. Care fees change regularly—use the Care Rate Calculator for current estimates in your area.