23rd Mar 2017
Retirement
By Ashley Shepherd
Shocking research from Royal London shows people who go in to residential care could face bills from £50,000 to £93,000 at the end of their life.
According to the analysis - which was based on someone spending 30 months in residential care - variations in house prices around the UK mean that these costs could amount to anything from 18% to 56% of the value of a home.
For example:
- people living in the North East, where the average house price is just under £129,000, could face an average care home bill equating to 56% of the value of their home;
- those living in London (average house price £483,803) may find that 30 months in residential care equates to 18% of the value of their property.
Care costs as a percentage of the value of a home
Full results for Scotland, Wales, Northern Ireland and each English region for average stays and costs in residential care homes are provided in the table below:
*In Scotland, the Scottish government will meet the part of care home bills relating to social care, and so the proportion of the value of a typical home taken up will be lower than in the rest of the UK. The figure shown here is net of the social care contribution from the Scottish government.
What about stays over 30 months?
The length of time for which someone stays in a residential home can vary widely. For those with the longest stays, the total bill can exceed the value of a typical house in several parts of the UK, suggests the study:
- 10% of people living in residential homes have a stay of 6.5 years or more;
- those living in Wales, Northern Ireland and four English regions (North West, North East, Yorkshire and East Midlands) could face a total bill in excess of the value of their home.
Postcode lottery
Not only is there in a variation in how much the costs of residential care may “eat” in to the value of a home, but where you live will also affect whether you get help with the costs from the state. For example, in Scotland, the Scottish government will meet the part of care home bills relating to social care.
What is the government doing to help?
As part of the Care Act, on 1 April 2016 the government planned to implement a care cap of £72,000 on the amount of money everyone would pay for the cost of care over the course of a lifetime. In July 2015, however, it was announced that the plans would be delayed until April 2020.
This means that the cost of long term care remains the responsibility of the local authorities for people whose income and assets are assessed as being beneath the threshold, while those people who are self-funding a care home, will have to continue to pay all their fees.
The future
Figures from 2015 showed that local authorities now operate fewer than 1000 residential care homes with between 40 and 50% of all older people living in residential care having to pay for the costs themselves.
And with an ever increasing ageing population - the number of people aged 65 and over is projected to rise by 40.77% by 2034 to around 16 million - at Over50choices we believe that the costs and financial help associated with residential care need to be addressed so it offers an affordable, level playing field for all, no matter where they live in the country.