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Finances for foster carers

The typical annual income for a National Fostering Group foster carer is £22,000 a year. The amount paid depends on the type of care the child needs, and is usually tax free.

We really value our National Fostering Group carers and the children they care for, so we believe it’s really important for them to have a good quality of life. As a carer with National Fostering Group, you will receive a typical income of £22,000 a year, most of which is tax free.

  • You will receive a generous fostering allowance for a child in your care
  • You may also be exempt from paying tax on this allowance
  • You’ll need to register as self-employed and pay NI contributions
  • You might also be entitled to Working Tax Credit

What does the allowance cover?

It’s intended to cover all the needs of each foster child including food, clothing, travel, activities, savings and so on. We provide clear guidance on how you can best spend the money so that the child has a healthy, happy and balanced life.

Everyone’s fostering allowance is different, because it’s dependent on the type of care provided, for example if a child has complex needs. It also depends on the age of the children and whether you are fostering in London, the South East or the rest of the UK.

Will I be taxed on the allowance?

In general, foster carers are exempt from paying tax on the fostering allowance. The exception would be if a foster carer with multiple placements or additional work gave an income above the current government threshold.

For tax purposes, foster carers are regarded as self-employed. You can find out more about being a self employed foster carer from HM Revenue & Customs.

Will I have to pay National Insurance?

All foster carers must register as self-employed and pay National Insurance contributions. Find out more by contacting the newly self-employed helpline.

Do I qualify for tax credits or additional benefits?

Fostering counts as self-employment, so you may be entitled to Working Tax Credit and also Child Tax Credit if you have children of your own. Find out more about tax credits and see if you are eligible.

To find out if you are eligible for any additional benefits or fostering allowances, please contact the Department for Work and Pensions (DWP).

Am I eligible for bridging retainer payments?

We understand having a regular income from your fostering allowance is pivotal, so we do all we can to provide you with more security in between placements. This is in the form of a weekly bridging retainer payment, plus another payment made at the start of your next placement. You will qualify for Bridging Retainer Payments if:

  • You are available for fostering and have no children placed with you
  • You have been an approved foster carer with National Fostering Group for one year or more
  • You have not already received 6 weeks of Bridging Retainer Payments in a rolling 12-month period
  • You are not ‘on hold’ with your agency, or offering respite care only
  • You haven’t turned down placements we consider to be reasonable
  • You did not give notice on your last placement which we feel to be unreasonable

Decisions on eligibility are at the discretion of your local National Fostering Group agency’s registered manager.

Need more information about fostering pay?

The best way to get more information is to fill out our enquiry form for a callback. An advisor from your local National Fostering Group team will get back in touch to explain more about how to become a foster carer, and answer any questions you have at this stage.

Start your fostering journey with National Fostering Group

  • We’re 14 close-knit independent fostering agencies
  • Over 3,500 carers already part of our family
  • Benefit from our local support groups and social workers
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