Postcode lottery of long-term care home fees

Monday 8 December 2008

Postcode lottery of long-term care home fees

  • Residential care is over 3 times more than the average annual mortgage payment
  • Care fees rise faster than RPI
  • Long term care is not 'free' in Scotland

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Care home fees vary by almost 50% across the UK*, and are typically 3 times the average annual mortgage payment** reveals the first annual Saga Cost of Care Report published today. 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 the 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 all 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 property purchase, 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 costs 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, contact Saga at or phone 0800 056 6101.


All figures quoted within this release are for the cost of a single room.

* Saga Annual Cost of Care Report 2008. Saga commissioned the Cost of Care Report from Laing & Buisson, the leading provider of market intelligence on the long-term care industry. Figures are based on fees reported by 1,644 of the 11,878 registered private and voluntary care homes for older people in the UK responding to Laing & Buisson surveys between April and June 2008, plus minimum and maximum fee rates contained in inspection reports published by the Commission for Social Care Inspection in England.

**Average cost of a mortgage = 7,860. Source: Council of Mortgage Lenders, Based on 100,000 repayment mortgage with an interest rate of 6.06% (August 08).

*** Average increase in residential care fees from 2002 to 2007. Source: Laing and Buisson Care of Elderly UK Market Survey 2002 & 2007

**** Research carried out by Opinium Research for Saga Care Funding Services between 17th and 21st July 2008 amongst a UK representative sample of 2,209 respondents.

Explanation of care costs

In the United Kingdom care is generally broken down into three component parts; accommodation costs, personal care, and nursing care. Accommodation costs are the actual cost of staying somewhere, be it one�0027;s own home or a care home. Personal care (also known as social care) comes firmly under the wing of the local authority who are able to apply a means test. Nursing care however has nothing to do with the local authority and instead comes under the wing of the NHS or, more locally, the Primary Care Trust (PCT). A central tenet of nursing care provided by the NHS is that it is free at the point of need and the NHS is unable, and indeed has no need, to apply a means test.

Full product details

Saga Care Funding Advice Service

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All advisers have CF8 qualification as a minimum and are knowledgeable in all aspects of care funding legislation and the financial products available

Initial discussions and advice is free

For further press information please contact the Saga Press Office on: 01303 771529.

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