Postcode lottery of long term care home fees

Care home fees vary by almost 50% across the UK, and are typically three times the average annual mortgage payment reveals the first annual Saga Cost of Care Report.

The analysis, in conjunction with Laing and Buisson, shows Northern Ireland is the cheapest region for residential and nursing care and the Northern Home Counties the most expensive for nursing care with London the most expensive for residential care. Contrary to popular misconceptions, care is not free in Scotland and fees there are exposed as more expensive than Wales, Northern Ireland and North of England.

Regional differences

By region, nursing homes were at their most expensive in the Northern Home Counties where on average the cost was £43,472 p.a., Northern Ireland had the cheapest nursing homes with an average of £27,976.

Northern Home Counties nursing care is, on average, 47% more expensive than that in the North of England resulting in a £13,988 p.a. difference.

No nursing homes were found in Northern Ireland that cost more than £31,148 p.a.

By contrast 93% of nursing homes in inner or outer London cost more than £31,200 p.a.

Residential homes (providing accommodation but not nursing care) were at their most expensive in London where fees averaged £29,484 p.a. By contrast, Northern Ireland again provided the cheapest with an average cost of £20,904 p.a.

61% of Scottish residential care homes were found to charge between £23,400 and £25,948 p.a.

Alex Edmans, Saga Care Funding Advice Service explains, "After purchasing property, long-term care is likely to be the biggest expenditure in someone's lifetime. However, unlike buying a property, the cost of care is something particularly difficult to plan for, especially when people are faced with such enormous regional differences. This makes it vital to seek advice if you find yourself in these circumstances. With the right advice however this frequently underestimated cost need not financially ruin someone's estate and any potential future inheritance."

Residential long term care 3 times more than the average annual mortgage payment

On average someone who requires care in a residential care home may expect to pay in the region of £25,000 per annum, a huge ongoing sum of money to find at any age, yet alone in their later years. Compare that for example with the average mortgage cost which is small by comparison at just £7,860 per annum.

Care is not ‘free' in Scotland

Contrary to popular belief, care is not free in Scotland. In the United Kingdom care is generally broken down into three component parts; accommodation costs, personal care, and nursing care. However, unlike in England, Wales and Northern Ireland, the Scottish state pays for personal care and nursing care. Since it's inception in 2002, state funded personal care has meant that Scottish people requiring care can be better off than their English, Welsh or Northern Irish counterparts. But the truth is that Scotland does not have a ‘free care' system, it is often misunderstood by those who use it and has distorted other charges made by care providers.

If you need to stay in a care home in Scotland then the state will cover your personal care and your nursing care (currently £149 and £67 per week respectively). However you will still need to pay for your accommodation costs, which usually constitute the lion's share of the total cost. Because Scottish care homes are unable to set the charge for personal or nursing care, we have seen the care home accommodation costs increase by 69% since 2002 when the new legislation was introduced, which compares to an average increase across the UK of 48%.

Rising cost of care

On top of the already high cost of care and massive regional differences, The Saga Cost of Care report also reveals that, in the last decade, care home fees have risen faster than general economy inflation. On average over the last three years care home fees have risen by 1.5% more than the Retail Price Index

A nation unprepared for the cost of care

Further research from Saga which looks at the attitudes of people with parents facing the prospect of long-term care has revealed those regions most unprepared to foot the bill. Almost a third of people in the Midlands (32%) think that their parents will be forced to sell their homes in order to pay for care. People in Wales and the South West are the most concerned that their parents will be unable to afford the cost of care and will have to live with a relative rather than in a residential home (31%). Children in the capital are most likely to be called upon by their parents to help subsidise their care fees, as parents are unable to foot the bill themselves. More than one in ten (13%) Londoners are expecting to have to help their parents out financially.

Alex Edmans concludes "The cost of care is not a subject people talk to their parents about and as such the whole subject of care is only broached when it is required, usually at a time of crisis, - never the best time to be making long term financial decisions. Long-term care planning can be a daunting prospect, but with proper advice people can achieve peace of mind and may prevent any unnecessary sale of a house."

For information on paying for long-term care, visit saga.co.uk/money-shop/care-funding