If you’re starting the search for a care home you will have many questions. The cost of a place in a care home is likely to be up at the top of the list. They are seemingly very expensive, particularly if specialist care, for someone living with dementia for example, is required.
There is some confusion about care home costs – how they are made up, who pays for what, and what different funding options there may be. In this guide we aim to de-mystify care home fees so that you are able to make the best decisions with your parents and relatives.
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Top tips for funding care home fees
How much does a care home cost?
Care homes are owned/run by a range of different organisations; from national groups of often larger scale homes owned and operated by private companies, to small owner managed businesses and charities including benevolent organisations.
The cost may not vary too much between different providers, except perhaps with charities, although they too need to re-invest in their homes.
Whilst none of this may actually matter to your final choice, or the options you are able to choose from, the ethos and day to day operation of the home may well be a factor in your decision-making.
Nursing homes and Residential homes – how average fees vary by the type of care home
There are 2 types of care home: residential care homes cater for people who are able to live mostly independently, but who might need help with washing and dressing and other tasks such as giving medication.
The cost of residential care is less expensive than the second type – nursing homes – which provide dedicated medical support and nursing care in addition to personal care. There are also care homes of both types which provide specialist care, such as dementia care, which will come at a further premium. The average annual costs of the different types of care homes are:
- Residential homes – £681 average per week
- Nursing homes – £979 average per week
- Specialist dementia care homes/units – £1,100 average per week
- (respite care – often available for short-term stays upto 2 weeks – approx. £477 per week)
These are average care home fees across the UK, with different fees in the nations, and marked differences across the regions of England (similar to house price differences).
Specialist care by its nature will be more expensive, particularly if it is round the clock, or requires specialist therapies.
(Source – LaingBuisson 2022).
How are care home fees made up?
In general terms care home fees are broken down as follows:
- Board and lodging 15% (room, meals, laundry plus shared costs including admin, cleaning, insurance, rates, utilities etc)
- Staff costs 50%
- Medical costs £5%
It is not always easy to get a clear breakdown of costs, so always read the small print of the contract to ensure you understand if there are hidden extras – such as outings or entertainment, or GP visits. (You will note that the figures above only reach 70% of the fee – the care home provider – will build in a profit margin).
Who pays for care home fees?
Under the current system of funding for care home places, local authorities will have a set price negotiated with the care home for the residents they are funding. This is likely to be significantly less than the fees an individual pays for themselves. Essentially privately funded care home places contribute to funded places. Not ideal but it explains the difference in price between the two.
Help with funding care home costs
Even if you are funding the care home fees yourselves it is recommended to arrange a local authority care needs and financial assessment. This will determine what care is needed and how it might be funded. It will include any nursing care required, and this will help with funding support from NHS through their Funded Nursing care contribution – which will be paid directly to the home by the NHS.
Benefits and care home allowances
Moving into a care home does not mean that the resident is no longer able to access benefits such as Attendance Allowance, Disability allowance or carer’s allowances. All of these can help offset the cost of the weekly fees.
Selling the house to pay care home fees
If one parent remains at home it will not be included in any calculations regarding self-funding care home fees. So – your Mum will not need to sell the house in order to pay for her husband’s place in a care home. It will be her husband’s assets and savings that will be used to calculate his ability to pay the fees or not.
Should savings run out and different decisions have to be made, there are options to consider before selling the family home:
Deferred payment options
In some circumstances you can sell the home to the Local Authority in lieu of care home fees. This is known as a deferred payment agreement. The house will only be sold after your parent has died, and the proceeds go to the Local Authority.
A note of caution: running down assets or transferring ownership of a house to be below the threshold for self-funding could be called deprivation of assets which will be penalised by the Local Authority.
Considerations before signing a care home contract
Changes to care home costs are regulated to protect the consumer
There are consumer rights regarding care home contracts through guidance published by the Competition and Markets Authority.
It states that care homes across all UK nations are required to present key information to help you make a decision. Important information, such as the care home’s fees, must be clearly highlighted, easily accessible.
Care home contracts must be written clearly and simply to ensure residents and/or their representative are able to easily understand their rights and responsibilities.
In accordance with consumer law, if the contract is unfair, it will not be valid. Unfair contractual terms are not legally enforceable. A contract is unfair when it puts the resident and/or their representative at an unfair disadvantage, such as giving the care provider more rights than a resident. Unfair care home contract terms could include:
- The provider holds the resident to account for things that are their fault (e.g. failure in care leads to injury or death of resident)
- Allowing the care home to increase fees unexpectedly
- Not giving the resident important information
- Charging fees for an extended period of time following a resident’s death.
Beyond the bingo - the price of a care home
There has been a lot of concern about care homes during the pandemic. The vast majority worked tirelessly under almost impossible circumstances to keep their residents safe and well.
There are also ongoing concerns about staffing levels in care homes. You may well be anxious about a possible move, so it is even more important to do your research, ask questions of staff, residents and families before you sign a contract. Some key questions to ask include:
A care home is expensive comparatively speaking to other care options such as remaining at home and receiving live-in or day care. However, it may be the best option for your relative for a range of reasons: receiving 24/7 care and support they need; companionship and activities to maintain their quality of life; peace of mind for you to know that they are safe and cared for.
If at any time you are concerned for their welfare, then there are procedures and processes you can follow with the care home staff. In very particular circumstances you may need external help. Contact the Relatives and Residents Assocation which campaigns for care home residents. Our guide to how to make a complaint will give you the information you need.
Half a million people live in care homes in the UK, the vast majority wonderfully cared for by extraordinarily dedicated staff. You only have to read some of the reviews.