- Average older person’s savings pot would pay for just 6 months of care
- Cost of a room in a care home has risen 3.5% to £28,367 per year since 2012
The average cost of a room in a care home is more than double the average pensioner income, representing a yearly shortfall of £14,568 according to research from Prestige Nursing+Care. The cost of residential care has risen by 3.5% in the past year and 9.3% in the past two years.
Since 2012 the average annual cost of a single room in a residential care home has risen by £963 from £27,404 to £28,367. This is £2,414 higher than in 2011. While pensioners’ annual income has grown by 4.5% (£591) in the last year to £13,799, the gap between income and care costs has continued to increase.
Pensioners need an additional £247 each week to be able to meet care home costs. Those looking to cover the costs of care through savings won’t be able to for long, with the average older person’s saving pot of £14,217 now only able to pay for six months of care. Combining a pensioner’s average annual income with their savings pot still falls short of covering a full year of care in residential home by over £350 pounds.
2013 has seen residential care costs in London, the South West, and East of England all above £30,000 for the second year in a row, joined by the South East for the first time.
Average Cost of a Single Room in a Care Home and Pensioner Income
|Care Home Region||2012 Annual Cost||2013 Annual Cost||2012 Annual Pensioner Income||2013 Annual Pensioner Income|
|East of England||£31,044||£30,623||£14,040||£14,924|
|Yorkshire and the Humber||£27,352||£27,424||£12,168||£12,688|
The South East became the most expensive region for elderly care homes this year, overtaking the South West with an annual cost of £32,048. A room in the South East is £7,405 more per year than in the North East where prices are lowest. The North East also boasts the smallest care cost gap of £10,602, which is almost £7,000 less than the biggest care cost gap of £17,579 in the South West.
Wales saw the biggest yearly increase in the difference between cost and income, rising by 29% to £15,516 from £12,064 last year. The East of England was the only region to experience a decrease in the care cost gap, which fell from £17,004 to £15,699 this year.
Home care is another alternative for older people to consider – with 10 hours a week constituting an average of £7,200 annually. This is a quarter of the cost of a single room in a care home.
Jonathan Bruce, Managing Director of Prestige Nursing+Care said:
“As the cost of care continues to outpace pensioner income, pensioners’ shrinking savings pots are contributing to the worrying financial conundrum of how later life care can be funded. In trying economic times, relying on family members to foot the bill isn’t always a viable option, while the governments’ purse strings are tighter than ever with £11.5billion of spending cuts planned. While the government’s proposed care cap will help some older people, they will still have to incur a significant financial outlay to reach the cap.
“Homecare is a more cost-effective option than residential care, and can be appropriate for all but the most severe levels of care need. Even this though can still amount to a considerable bill over the years. We need to ensure the population are care cost-savvy so better financial planning can take place earlier on in life. The key to this is greater provision of information and greater understanding.”
Simon Bottery, Director of Policy and Communications at Independent Age said:
“Care choice should be based on need not costs so it’s essential that people get good advice about their rights to state-funded care and their financial options if they are self-funding. This becomes even more important as care bills rise and will further increase as the proposed ‘cap’ on care bills is introduced in 2016 because the proposed system is complicated and far from comprehensive.
“It’s also vital that people understand the benefits of different types of care – care at home, supported housing and residential care – so they can choose the one that best fits their needs and aspirations.“