Average cost of a care home hits £30k - more than double pensioners’ income

The average cost of a care home has exceeded £30,000 for the first time ever, with the annual cost rising ten times faster than pensioners’ incomes, according to new research.

The average cost of a care home is now more than double the average pensioner income, revealed Prestige Nursing + Care.

The nurse and care staff agency carried out a five year study which found the annual cost of a care home has increased by £1,536 over the past year – almost ten times the average £156 income gains enjoyed by pensioners over the same period.

London has 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 per cent.

Jonathan Bruce, managing director of Prestige Nursing + Care, called it “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”.

He added: “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.”

This research highlights the escalating costs for those above the threshold of £23,250 who have to fund their own care. Pensions and people’s savings have been hit by low interest rates which are likely to worsen at the same time as care costs escalate.

Mr Bruce partly blames the rise in care costs on the increase in the national minimum wage. However he said: “Care workers and nurses absolutely deserve the boost they have received to their pay.”

“For many, 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.”

Costs for an average single room in a UK residential care home have risen by 5.2 per cent to £30,926, more than double the average pensioner’s income of £14,456, while pensioner incomes grew by just 1.1 per cent over the last year.

In response to the findings, a spokesman for the Department for Health said: "It has always been the case that social care is means-tested, but help is available for those who cannot afford to pay.

"Landmark reforms mean people will not be forced to sell their home to pay for care in their lifetime, will have the same right to care and support no matter where they live in the country, and this year we increased the amount that nursing homes can claim from the NHS to pay for nurses. Our pension reforms have also ensured that those in retirement get guaranteed above-inflation increases."