Care-seekers often state that they are concerned about how they are going to meet ongoing care costs for their family member.
It is not uncommon for care providers to increase their annual fees in line with inflation. This is of particular concern for those who are required to fund their care privately.
As of January 2025, inflation sits at around 3%, so if the cost of care was £1,000 a week, you can expect a price rise of around £30 a week.
Care providers are exposed to the same inflationary pressures as other businesses and households across the country, with soaring energy prices and increased staff costs. Care services have to pass on some of these costs in the prices they charge to provide support.
5 top tips for affording care:
If you are currently looking for care, it’s important to consider how you will meet ongoing costs. Below is a list of considerations when shortlisting services.
1. Don’t be caught out by ‘prices from’ when budgeting for care...
Due to intervention and legislation from the Competition & Markets Authority (CMA), care providers are now obliged to clearly display their pricing on marketing material, including their websites. Prices given are nearly always ‘prices from’; depending on care needs, the actual price of care can be significantly higher. So, before deciding whether a particular care home is affordable, it is important that you ask them to carry out a Care Needs Assessment so an accurate cost can be given.
2. Contracts - what is the provider’s policy regarding fee increases?
It’s essential to read the small print and what sureties are written into the contract regarding fee increases. Some care providers are at liberty to make increases when they choose, and others have the option to make bi-annual/annual increases.
Providers may have a ‘special offer’ upon moving into the care home, but it’s important to budget for ongoing care costs when the offer runs out.
We are aware that many providers have recently raised their prices due to soaring energy costs, but others are committed to fixing their costs for the foreseeable future to entice new residents.
3. What happens when the money runs out...
It’s common for care providers to ask for proof of 2 years' worth of funding upon moving into their service. Should your loved one live longer than they can afford to pay for privately, it’s essential to know the care provider’s policy regarding accepting local authority funding.
Some providers require a third-party top-up fee when residents move to local authority funding. This means that family members must fund ongoing care costs if they are to continue staying at the service.
The alternative would be to move to a different provider which accepts LA funding when the money runs out. However, when considering this as an option it is worth bearing in mind that once somebody is happy and settled within a care home moving to a different service can cause much upset and distress.
4. Beware of initial administration charges...
The charging of initial administration fees is a controversial matter. Many care providers ceased charging administration fees when the CMA conducted a study into the practice and concluded that it was an unfair consumer practice. Many providers decided to reimburse care-seekers for these costs based on the CMA’s updated guidance.
CareUK chose not to reimburse costs and as a result, the CMA took them to court. In July 2021, the High Court ruled in Care UK’s favour & the case was thrown out.
In light of this, the CMA updated their guidance to care providers and still advises against charging upfront payments unless there is a clear justification for it. You should not be expected to pay in advance for any of the following:
- Pre-contract activities which form the costs of the care provider doing business
- Activities related to admission which do not involve the provision of materials
- Maintenance or improvements to the home
5. Seek advice from a regulated Financial Adviser...
By seeking regulated financial advice you should be informed of the best way to meet ongoing care costs. You may wish to consider purchasing a Care Annuity, in essence, this is an insurance policy. For an upfront fee, your annuity provider guarantees to continue paying care costs for the lifetime of care.