The annual cost of a care home place has increased by £1,536 – 5.2% – over the past year according to research from home care agency Prestige Nursing + Care.
The annual growth rate has more than doubled from the 2.5% increase from 2014 to 2015. This fastest growth rate since Prestige began collecting data in 2012.
The annual shortfall between care costs and pensioner income amounts to £16,470 (£317 a week), should they need to pay for residential care in later life, up 16% from £14,196 four years ago. The total cost of care annually amounts to 114% of the average pensioner’s income after tax.
Jonathan Bruce, managing director of Prestige Nursing + Care said: “It is particularly alarming that care home costs have risen almost ten times as much as pensioner incomes in real terms, with the result that older people will find the challenge of paying for care even more out of their reach.
“Cuts to social care now also mean the vast majority of people will have to find the funds to cover the cost of care themselves, which makes it more important than ever that people start to plan their care in advance. The lack of awareness of these issues, and appetite to tackle them, illustrates the need for a sensible and mature debate on the value our society places on care.
“Care workers and nurses absolutely deserve the boost they have received to their pay, but the increase in the minimum wage has no doubt pushed the cost of elderly care upwards.
“The widening gap between costs and income will make it difficult to receive the amount and quality of care they require without substantial savings to fall back on. There is typically a reluctance to plan for care in advance, and the industry and policymakers must increase awareness of the need to prepare for the cost of care earlier on in life.”
London is the region with the most expensive care homes (averaging £38,896 per year) – having overtaken the East of England (£37,908 per year) in the last year – and has also experienced the biggest annual rise in care costs of any UK region at 19%.
The capital is also the region to see the shortfall in income and cost increase the most over the last year (32% or £5,408). However, the East of England remains the region with the greatest care cost vs income gap: £22,828. This has grown by £4,004 or 21% over the last year.
Jonathan Bruce added: “There remains a clear North-South divide, whereby the South faces the greatest challenge when it comes to funding care. The challenge of paying for care in later life needs a broad range of options, of which access to home care is a fundamental part of the solution.”