Care home costs rise ten times faster than pensioner incomes
• Average cost of a care home exceeds £30,000 for first time – more than double the average pensioner income
• The 5.2% growth rate has more than doubled since 2014/15 and is the highest since before 2012
• Pensioners’ incomes able to fund less than six months’ care as annual shortfall reaches £16,500 – or £317 a week
• Ten out of 11 GB regions see gap between care costs and pensioner incomes widen over past year
• Care at home can save more than £20,000
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, according to a five year study by Prestige Nursing + Care.
Costs for an average single room in a UK residential care home have risen by 5.2% to £30,926, more than double the average pensioner’s income of £14,456, while pensioner incomes grew by just 1.1% over the last year.
The annual growth rate of care costs (5.2%) from 2015 to 2016 has more than doubled from the 2.5% growth rate from 2014 to 2015. This is far higher than the current rate of inflation (0.3%)* and the fastest growth rate since Prestige began collecting data in 2012.
Pensioners short by £290 a week if they require residential care
The annual shortfall between care costs and pensioner income amounts to £16,470 (£317 a week), should they need to pay for residential care in later life, up 16% from £14,196 four years ago. The total cost of care annually amounts to 114% of the average pensioner’s income after tax.
This shortfall has increased by 9% in the last year alone from £15,089 a year, or £290 a week, in 2015. This means the average pensioner’s income would now pay for less than six months of care – despite research from Saga showing the average stay in a residential home is 2.5 years**.
Table 1: Annual care cost vs pensioner income 2012-15