The average weekly cost of living in a residential care home is £928, while the average nursing home cost is £1,025 per week, new research has shown.
As the cost of living crisis continues – inflation has hit care homes especially hard, leaving residents paying eye-watering weekly sums.
Two of the biggest pressures on the care home sector are energy and staffing costs – two things that have been exacerbated by the cost of living crisis.
Annual residential care home fees cost around £48,000, while nursing care costs around £53,000 per year, according to abrdn research.
An expert explained that although care seems to be an unlikely requirement, or an expense people hardly think to plan for, as people are living longer, the cost of care itself will only continue to rise.
Shona Lowe, financial planning expert at abrdn said considering the increasing costs of long-term care and healthcare in later life is critical, no matter how far off or unnecessary that might feel right now.
She explained that if people wait until a crisis has happened, or care is necessary, it may be “a little too late” – particularly when a quick solution is needed to find the sums required to fund care.
Meeting the cost of care may not be something that can be solved quickly and there may have been better ways to achieve it given more time.
And when people combine that with the emotional stress of arranging the care and the understandable focus that needs, it’s important to factor in the financial planning as early as possible.
Ms Lowe suggested the “best way” to prepare for the cost of care is to save little and often, starting as early as possible.
How to save for care costs
Ms Lowe continued: “At-home care and residential care in a home could be one of the biggest expenses of your life. On average, it can cost around a thousand pounds a week but in some cases, the cost of care can be several times that.
It can be difficult to predict whether people will need care, for how long, and whether it can be delivered in their own home, which is typically cheaper. However, more than half of care home residents have their costs at least partially covered by their local council.
The council must cover some or all of one’s are fees if they’re assessed as needing care and have less than £23,250 in assets in England and Northern Ireland, £28,750 in Scotland or £50,000 in Wales.
She said: ‘If you find yourself in a position of being able to save some money each month, it would be advisable to speak to a financial planner or adviser about whether some of the savings should be assigned to fund future care, if and when needed.
“A professional adviser will also be able to help you understand the ways in which you can fund care, from equity release, to downsizing, to utilising your pension or other investments and help you to build a plan that has that factored in that potential outcome.
“My biggest tip for those looking to build up some reserves to potentially fund care is to review your income, expenditure, savings and investments as a whole – including how much to save and where you save it – look at both the current and possible future positions and leave yourself some flexibility to adapt your plan as you need over time.”
The abrdn research found that one in three over 40s plan to hold money back for later-in-life care costs – but 68 percent don’t, or aren’t sure if they will. A quarter of those aged 40 and above are most concerned about being able to afford the cost of care in later life – more so than any other aspect of retiring.
Additionally one in ten haven’t started to save for the cost of care because they’d rather spend their money at the beginning of retirement while they can enjoy it and five percent think the government will fund their cost of care.
Another option is funding through the NHS Continuing Healthcare (NHS CHC). The NHS will fund care for those with the most complex medical needs, regardless of financial situation.
Ms Lowe stressed the fact that she wouldn’t recommend that people relying exclusively on this help to meet all care costs.
These could change over time, or someone’s circumstances could mean they don’t qualify for support. And even if they do qualify, they may not receive the total sum required.
She concluded: “That’s why planning ahead is essential.”
