Self Funding Care – Care Home Costs 2014

October 1, 2014 in Self Funding Care Guide | 0 Comments

Should you or a loved one require some form of long-term care, a natural question to ask is: how do I fund it?

The average annual cost for a Care Home in England is around £30,000; with life expectancy being so high, a lot of us are likely to discover a shortfall in how long we can afford to pay for our care.

Type of care Average cost (2013/14) Cost over 4 years
Residential care £28,500 per annum* £114,000
Nursing care £37,500 per annum* £150,000

*Source: Laing & Buisson

But what if all of your money is tied up in your house, or in shares? What if it’s in a savings account that you want to leave to your children? Will you have to sell your home, or spend your children’s inheritance?

Care Act 2014

From April 2016, a cap of £72,000 will be placed on the amount of ‘personal care’ costs an individual will pay in a nursing or residential care home. However, this does not include accommodation costs which will be capped at £12,000 per annum. Ministers believe that the cap will help more people and is an attempt to deal with some of the costs associated with an ageing population.

If an individual resides in nursing home for 4 years, the average cost will be £120,000 – £48,000 of this will be spent on accommodation with the remaining £72,000 spent on ‘personal care’ costs. It will therefore take approximately 4 years before the cap has any effect and the annual cost for accommodation will still need to be met after this point.

What next?

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