In the report, published by the Joseph Rowntree Foundation, Professor Geraint Johnes, Dr Hilary Ingham and Sally-Marie Bamford (of think tank International Longevity Centre-UK) found that the new National Living Wage will affect at least 50% of care home workers.

The report notes that paying higher wages reduces the need for in-work benefits.

Professor Geraint Johnes said: " In the run up to the Autumn Statement, we hope the report will give the Chancellor an opportunity to reflect and act on what needs to be done to support the care services. The national Living Wage will impose costs on the sector that will need to be retrieved through a mix of channels.

"Since central government will benefit from reduced welfare payments and increased tax receipts, it is well placed to support local authorities and other providers as they adjust to the higher wage payments.

"Some workers will find that one hand takes away, in the form of reduced welfare, what another gives, in the form of a higher wage. This is in line with the government's stated aim of switching support for lower income workers away from benefits, placing the onus on the employer."

View the report in full on the Joseph Rowntree Foundation website.