What is a fostering allowance?

A fostering allowance covers all costs of caring for a child or young person, including food, clothing, transport, education, hobbies, and daily living expenses.

What is the foster carer reward element?

The reward element is the amount paid to the foster carer for their role and work. It is separate from the child allowance and is retained by the foster carer.

Do fostering allowances change each year?

Yes. The government updates fostering allowance minimum rates annually. The 2025/2026 rates increased by 6.55%.

Are additional expenses reimbursed?

Yes. Foster carers may be reimbursed for specific extra costs such as therapy, specialist support, or authorised expenses.

How do savings work for fostered children?

Savings for children in care are usually managed by the local authority and must be given to the child when they reach independence.

About Fostering Allowances | Payments & Allowance Breakdown (2025/26)

About fostering allowances

The amount you receive from fostering can be defined by different terminology or descriptions, including two key terms – fostering allowance and foster carer payment. Understanding the terms and allowances payable to the child or young person is essential.

Foster carer payment

Your total foster carer payment is represented by two main elements:

1. Children allowances

This is an amount to be paid to cover the costs of looking after the child or young person (please see below). It can be referred to as fostering allowances.

2. Reward element

This is the financial balance you are paid for your hard work as a foster carer. The foster carer retains it, and it does not cover any direct costs for the child or young person.

An additional payment can be made as part of your foster carer payment toward specific extra costs for the child or young person. For example, if you, as a foster carer, pay directly for the input from an art or drama therapist, then this amount would be reimbursed. These expenses would effectively be repaid.

Children allowances
(Fostering Allowances)

The allowances for a child or young person are impacted by the age, your fostering home location and their overall needs. The allowances cover and include (but are not limited to):

Personal costs (eg. toiletries)
Clothing
Food
Recreation and hobbies
Pocket money
Educational support
Household costs
Holidays or day trips
Transport
Birthday and religious celebrations

The minimum levels set by the government must be covered by the fostering agency’s carer payment (together with the reward element). These were increased by 6.55% for the new tax year (2025/2026), and they are currently as follows, depending on your location:

Age	0-2	3-4	5-10	11-15	16-17
London	£198	£201	£255	£257	£299
South East	£180	£196	£216	£247	£288
Rest of England	£170	£176	£194	£220	£258

Example – If your total carer payment in Manchester (Rest of England) were £450 for a child aged 7, then the £194 level would apply. Therefore, your “reward element” would be £256 (£450 less £194 children’s allowances or fostering allowances).

Savings

The savings for each child and young person must be shared with them upon their independence. Most local authorities now keep these directly, but if applicable, your fostering agency may deduct the relevant savings amount based on the child’s or young person’s age and their own savings policy.

The above information is as of April 2025, and the government may update relevant fostering allowances further in future years.