The average cost of living in a care home has increased by 5.6 percent over the past year, to £30,926 – more than double a pensioner’s typical income. The 5.6 rise represents an increase of £1,536 on the previous year.
Pensioners’ average income of £14,456 increased by 1.1 percent or £156 for the same period. The rise in care fees is therefore more than 10 times the growth in pensioners’ incomes.
The rise has seen many pensioners digging into their savings or turning to their families for help with finances. The elderly and vulnerable that need residential care are having to find an additional £290 a week to meet the growing costs. While their annual income would pay for just six months of care, the average time for a person to use residential care is 2.5 years.
Looking across the country, care fees in London are the highest and have seen the biggest growth. The average annual costs of residential care in the Capital are £38,896. These have seen growth of 19 percent on the previous year.
Other areas of the country which have suffered from dramatic increases in fees include the Southwest, which has seen a rise of 5.8% to £35,360; the East of England which has seen a rise of 12.2% to £37,908 and the East Midlands, which has seen a rise of 10.6% to £28,860 – according to research carried out by Prestige Nursing and Care. Managing Director Jonathan Bruce is concerned that the increase in costs will make paying for care even more challenging for older people.
For those with capital assets – including their home – below the means testing threshold (£14,250), the Local Authority will cover the cost of care in full. Pensioners with assets between £14,250 and £23,250 have to pay a contribution to their care costs, while pensions with assets worth over £23,250 will have to pay for their care costs in full. With the increasing costs of care, many pensioners will find their assets dwindle to below the means threshold much faster, leaving them little in the way of savings.
One reason for the increase in care fees is the recent change to national living wage levels. While care workers certainly deserve better pay, the increases have been at least partly responsible for the rising cost of residential care.
For couples approaching later life, there are simple measures you can take to protect your assets from the threat of care cost fees. Speak to our Later Life Planning Team about how you can use your Will to protect half of your home from being considered when the Local Authority carry out their means test, should your partner need care later in life.