Care home costs reach £48,000 a year – check which options are best for loved ones | Personal Finance | Finance
The average weekly cost of living in a residential care home is £928, while the average weekly cost of a nursing home is £1,025, new research has revealed.
As the cost of living crisis continues – care homes have been hit hard by inflation, leaving residents paying staggering 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 like an unlikely necessity, or that people hardly think to plan for it, because people are living longer, the cost of care itself will only continue to rise.
Shona Lowe, a financial planning expert at abrdn, said it’s vital to consider the increased costs of long-term care and healthcare later in life, no matter how far-fetched or unnecessary it may seem at the moment.
She explained that if people wait until a crisis occurs, or care is needed, it could be “a little too late” – especially when a quick fix is needed to find the sums needed to fund care .
The cost of the care may not be quickly met and there may be better ways to achieve it in more time.
And when people combine that with the emotional stress of arranging care and the implicit focus it requires, it’s important to factor that into financial planning as soon as possible.
Ms Lowe suggested that the “best way” to prepare for the cost of care is to save small and often, starting as early as possible.
How to save on care costs
Ms Lowe continued: “Home care and residential care in a home can be one of the biggest expenses of your life. On average, it can cost around a thousand pounds a week but in cases certain, the cost of care can be considerable.
It can be difficult to predict whether people will need care, how long it can be delivered in their own home, which is usually 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 the fees if they are deemed to need 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 are able to save some money each month, it would be advisable to speak to a financial planner or financial adviser about whether, if and when, some of the savings should be allocated to funding care in the future . travelling.
“A professional adviser will also be able to help you understand the ways in which you can fund care, from releasing equity, downsizing, using your pension or other investments and helping you create a plan that factored in the outcome possible that. .
“My biggest tip for those looking to build up some reserves to fund care is to review your income, spending, savings and investments as a whole – including how much to save and where you save it – look at both the current and potential future. positions and leave yourself some flexibility to adapt your plan as you need over time.”
abrdn research found that one in three people over 40 plan to put money back for care costs later in life – but 68 per cent do not, or are not sure if they will. A quarter of those aged 40 and over worry more about being able to pay for the cost of care later in life – more than any other aspect of retirement.
In addition one in ten have not started saving for the cost of care as they would rather spend their money at the start of retirement when they can enjoy it and five per cent think the government will cover the cost of their care financing.
Another option is to get funding through NHS Continuing Healthcare (NHS CHC). The NHS will fund care for those with the most complex medical needs, regardless of financial situation.
Ms Lowe emphasized the fact that she would not recommend that people rely exclusively on this assistance to cover all care costs.
These may change over time, or someone’s circumstances may mean they do not qualify for support. And even if they qualify, they may not get the full amount needed.
She concluded: “That’s why planning ahead is essential.”
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