Average care home costs 'above £29,000 a year'

Caring nurse holding kind elderly lady's hands in bed.

The average cost of a care home now exceeds £29,000 a year after rising by more than £700 over the past 12 months, according to figures compiled by a nursing agency.

Prestige Nursing + Care warned that the hike in costs means that those who need care in later life could have to sell their homes in order to raise the funds.

Quoting figures from the Department for Work and Pensions, the company said the average cost of a single room in a UK residential care home is now more than double the average pensioner's income of £14,300.

The average price of £29,389 means that pensioners face an average shortfall of £290 a week if they require residential care, it warned.

The company said it is the first time care costs have grown at a faster rate than pensioner incomes since it began tracking the data three years ago.

The annual growth rate of care costs (2.5%) has more than doubled from 1.1% from 2013/14 - far higher than the current zero rate of inflation in the year to June 2015, it added.

The East of England has overtaken the South East to become the region with the most expensive care homes for the first time, averaging £33,800 per year - and has also experienced the biggest annual rise in care costs of any UK region (£2,912 or 9.4%), its research found.

At the other end of the scale, the North East offers the cheapest price, at £24,232 a year on average.

The company said the East of England, London and the South West have all seen care home costs grow faster than regional house prices over the last year.

Jonathan Bruce, managing director of Prestige Nursing + Care, said the issue was a "ticking time-bomb".

"Care home prices are rising faster than ever, outstripping the rate of increase in pensioner incomes for the first time in three years," he said. "This is particularly concerning in light of the decision to defer the Care Cap until 2020.

"It means more people needing residential care will have to bear the brunt of higher costs themselves, especially as council cuts to care continue to impact eligibility for financial support.

"Raising the minimum wage - while absolutely necessary and well-deserved by nurses and care workers - will undoubtedly push up the costs of a care home even further, and widen the massive gap between people's income in later life and the sums needed to pay for residential care.

"For those with emerging care needs, care at home can often prove to be far more cost-effective than residential care. It also allows people to remain in the comfort of their own home and maintain a sense of independence for longer.

"The issue of paying for care in later life is a ticking time-bomb that needs to be addressed and alternative solutions such as home care should be considered as a fundamental part of the solution."

Dream retirement destinations
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Average care home costs 'above £29,000 a year'

A study by MGM Advantage discovered that Portugal is the 10th most popular dream retirement destination among Brits.

You get the attractions of the sun, a more relaxed way of life, lower living costs and cheaper property. You can also benefit from pension arrangements that mean your pension rises with inflation.

And if you choose to, you can spend your time with the enormous expat population, feeling like you never left.

In the tradition of the Best Exotic Marigold Hotel, there’s a large number of people keen to move to India, partly in order to enjoy a much higher standard of living than they would be able to afford in the UK.

If course it’s important to consider that your state pension will not rise in line with inflation - so will halve in real terms during your retirement.

This part of Europe offers a great combination of some of the lowest living and housing costs on the continent, along with a more forgiving climate than the UK.

For that reason Bosnia and Herzegovina, Bulgaria, Croatia, Romania, Greece and Turkey are a big draw for retirees.

However, state pension provision varies across the region, so you will need to check whether retiring to these locations will mean your pension continues to rise in line with increases in the UK, or will be frozen when you move overseas.

Italy is a country of contrasts, so anyone planing a retirement there needs to think carefully about whether they want to call a bustling city home, or whether they would be happiest in the mountains or by the sea.

Housing tends to cost less than in the UK, and in some regions it's incredibly cheap. Living costs are also lower than in Britain, and your pension will rise in line with increases in the UK.

Canada is a big draw for British expats of all ages. This spectacular country is known for being welcoming to people from all over the world, and in many cases has no language barrier for Brits. The quality of life is high, and the cost of housing lower than in the UK.

However, you will need to factor in the fact that your UK state pension will be frozen on the day you leave, and you will need some health insurance if you want to replicate the sorts of things that are available for free on the NHS.

As with India, the Far East offers an exciting and dramatic change from life in the UK, with much lower costs, which can buy you a higher standard of living (although bear in mind your state pension will be frozen).

You will need to consider the cultural and practical differences associated with the move, but you will have the opportunity to live in one of the most exciting places in the world.

The weather, lifestyle, space, and lower cost of living means that British expats of all ages are keen to move to Australia.

Property can be a bit of a stumbling block in some areas, as prices have gone up so much. The currency is also strong, which has posed some issues for those who receive their income in pounds, and there’s the fact that the UK state pension will be frozen if you move. However, if you can overcome these things, then a new life in the sun awaits.

The US offers much more affordable housing, and in many respects a lower cost of living than in the UK.

It appeals to those who don’t want to live with a language barrier, but want more space, possibly more sun, and an American Dream of their own.

There are some important things to factor in before you move, such as the additional cost of healthcare, and the exchange rate. However, one bonus is that your state pension will rise at the same rate it does in the UK.

France is close to home, and yet offers cheaper accommodation than the UK, a lower cost of living, and in many regions there’s better weather too.

Your pension will rise at the same rate it would in the UK, and at any time friends and family are just a short boat or plane ride away. It’s no wonder France is the second most popular dream destination for retirees.

It will come as little surprise that Spain tops the list - largely because it’s already the most common overseas retirement destination for Brits.

Millions of us have experienced the delights of the sun, sea, and the lower cost of living while we were on holiday in the country, so it’s hardly a shock that so many want to experience it on a full-time basis in retirement.

Huge falls in the price of property has made this a cheap place to buy, and the fact that your state pension will keep pace with rises in the UK means you’ll be able to maintain your standard of living throughout your retirement.


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