understanding foster care pay and allowances in the uk
How fostering pay is delivered
Foster carers receive a weekly allowance that combines a professional fee and a child‑needs component. The weekly payment is usually transferred on the same day each week, providing a predictable cash flow that can be budgeted alongside regular wages or benefits.
Most local authorities also add a Bridging Retainer Payment at the start of a new placement, which smooths the transition between placements and reduces the risk of a cash‑flow gap.
When a placement ends, any outstanding weekly allowance is paid in the final week, and the next placement’s first weekly payment typically arrives within a few days of the child moving in.
Age‑based allowance tiers
Allowances increase with the child’s age because older children generally have higher living costs. The current National Minimum Allowances (NMA) for the 2025‑26 tax year are:
- Infants (0‑4 years): £180 per week
- Children (5‑10 years): £210 per week
- Pre‑teens (11‑15 years): £240 per week
- Teenagers (16‑17 years): £270 per week
- Young adults (18‑20 years, in care): £300 per week
The child‑needs component covers food, clothing, toiletries and activity costs; the professional fee recognises the carer’s time and expertise.
Skill‑level fees and progression
Beyond the age‑based component, carers can receive a skill‑based fee when they care for children with complex needs, sibling groups, or when they provide specialised support (e.g., therapeutic fostering). Typical supplements are:
- Complex‑needs supplement: +£50 per week
- Sibling‑group supplement: +£30 per week per additional child
- Therapeutic‑fostering premium: +£70 per week
Carers progress to higher fees by completing accredited training, demonstrating competence in managing specific needs, and undergoing regular performance reviews. Local authorities often provide a clear pathway, showing which courses unlock each supplement.
Regional variation and cost‑of‑living impact
Allowances are adjusted for regional cost differences. For example, the London and South‑East region adds a £30 per week uplift to the base NMA, while other English regions receive a £10 per week uplift. Scotland, Wales and Northern Ireland apply their own regional multipliers.
Understanding the regional uplift is crucial when estimating net income. The detailed breakdown for 2025‑26 can be found in the fostering allowances 2025‑26 explained for London, South‑East and the rest of England.
Placement scenarios: single child versus siblings
When caring for a single child, the allowance equals the age‑based rate plus any applicable skill supplement. For a sibling group, each additional child adds the sibling‑group supplement on top of their individual age‑based rate.
Example: A carer looks after two children aged 6 and 9 in the North‑West region (no regional uplift). The calculation is:
- Child 1 (6 years): £210 per week
- Child 2 (9 years): £210 per week
- Sibling supplement (1 additional child): +£30 per week
- Total weekly allowance: £450
Income stability between placements
Gaps can occur when a placement ends before the next one begins. The Bridging Retainer Payment typically provides a one‑off amount of £150‑£250, depending on the local authority, to cover basic expenses during the interim.
Carers who frequently experience short gaps may consider setting aside a portion of each weekly allowance in a dedicated savings account to smooth cash flow.
Tax treatment with worked examples
Foster care payments are generally classed as self‑employment income and are eligible for the Qualifying Care Relief (QCR) tax scheme. If the total earnings from fostering plus any other self‑employment income stay below the personal allowance (£12,570 for 2025‑26), no income tax is due.
Example 1 – Below the tax threshold: A carer receives £250 per week (£13,000 per year). After the personal allowance, taxable income is £0, so no income tax is payable.
Example 2 – Above the tax threshold: A carer receives £300 per week (£15,600 per year) and also earns £5,000 from freelance work. Total income = £20,600. Taxable amount = £20,600 – £12,570 = £8,030. Income tax at 20 % = £1,606. The carer must file a self‑assessment return and may need to pay Class 2 National Insurance contributions.
Further guidance on QCR and record‑keeping is available at foster carer tax qualifying care relief and record keeping.
Interaction with state benefits
Because fostering income is treated as self‑employment, it usually does not affect entitlement to most means‑tested benefits, but the interaction varies by benefit type.
Scenario A – Universal Credit: A single carer receives £250 per week fostering allowance and earns £150 per week from part‑time work. Their combined earnings are £400 per week. Universal Credit calculations consider the “earnings disregard” for fostering, meaning the first £250 is ignored, and only the remaining £150 counts toward the work allowance. This often results in a smaller reduction of the UC award.
Scenario B – Housing Benefit: A carer in the South‑East receives the regional uplift. Housing Benefit treats the fostering allowance as “non‑housing income” and applies the standard income taper. The carer should report the allowance each month to ensure the correct reduction is applied.
Common misunderstandings
- “Fostering pay is a salary.” It is an allowance intended to cover a child’s needs plus a professional fee; it is not a guaranteed salary and can vary with placement type.
- “All allowances are tax‑free.” Only the portion covered by QCR is tax‑free. Earnings above the personal allowance are taxable.
- “Benefits are always reduced.” Many benefits ignore the fostering allowance up to the amount of the professional fee, but the child‑needs component may affect means‑tested calculations.
- “I will receive the same amount for every child.” Age, regional uplift, and skill supplements create variation.
Financial comparison: fostering versus adoption
Adoption involves a one‑off cost (legal fees, agency fees, assessments) ranging from £4,000 to £9,000, plus ongoing expenses for the child’s upbringing. Foster carers, by contrast, receive a weekly allowance that directly offsets those expenses.
Example comparison: A prospective parent considers either fostering a 5‑year‑old (£210 per week allowance) or adopting the same child. Over a 5‑year period:
- Fostering total allowance (including a £30 regional uplift): (£240 × 52 weeks) × 5 = £62,400.
- Adoption total out‑of‑pocket costs (average £12,000) plus estimated child‑related expenses (£200 × 52 weeks × 5) = £122,000.
The fostering route provides a cash flow that directly funds the child’s needs, while adoption requires the parent to cover all costs from personal income or savings. However, adoption grants full legal parental responsibility, which may be a decisive factor beyond finances.
Where to find more detailed information
Local authority websites publish the latest National Minimum Allowance tables and regional uplift details. For a side‑by‑side look at what is guaranteed versus skill‑based payments, see fostering allowances vs fees – what’s guaranteed and what’s skill‑based. For specific tax queries, consult HMRC’s guidance on Qualifying Care Relief or speak with a qualified accountant experienced in foster‑carer finances.