The cost of care is ever-increasing and a report published by Prestige Nursing & Care has found that the average cost of a bed for an elderly resident exceeds £30,000 per year.
Compounded to this point is that the average annual elderly pension is in the region of £14,456 which means that the average pensioner only has enough to cover the basic costs of their stay in a care home for up to 6 months.
It is interesting that between 2012 and 2016 the cost of care has risen from £27,404 to £30,926, at the same time the average pensioner income has risen from £13,208 to £14,456. Increased pressures on local authorities to meet the costs of care within diminishing council budgets coupled with the introduction of the National Living Wage are likely to continue to drive the cost of care further upwards.
At present two out of five care home residents pay for the costs of their care privately with another one out of five residents contributing in part to the cost of their care. The remaining two out of five care home residents are paid for by the state. Interestingly a wholly state funded placement in a care home will on average pay 40% less than a corresponding private client for the same level of care. It may be that the gap in fees paid by privately funded and publicly funded residents is at that level precisely owing to the underpayment of fees by publicly funded residents. If the state were to pay more reasonably in line with the actual costs of care incurred by providers the discrepancy might reduce.
Whilst £30,000 per year for care might appear at first instance to be a large amount to stay in a care home, the level of service that is often supplied often matches the hefty price tag. Also, whilst a resident is not obliged to sell their assets to pay for the costs of their care a large number of elderly residents may find that this is an unavoidable option, regardless of how unattractive it might seem, in order to meet the cost of their care.