Millions are underestimating the cost of care

November 2, 2018

Millions of people are underestimating the cost of care, particularly paying for a care home place, according to Which? research released this week.

When the consumer champion asked people to estimate the cost of a private nursing home place in their region, more than half (55%) came up with a figure that fell short of the average cost.

On average, people are underestimating the cost of care in a care home in England by £237 per week – the equivalent of £12,000 a year.

One in 10 people underestimated the true cost by more than £757 per week – the equivalent of £39,000 a year and a quarter gave a figure that was too low by more than £507 per week, the equivalent of £26,000 a year.

Three in 10 people admitted they simply did not know the weekly cost of a care home with nursing in their region, while only one in seven (15%) got the answer right or overestimated the cost.

Londoners had the most unrealistic expectations overall, underestimating the cost of care in a care home with nursing by an average of £540 a week – the equivalent of £28,080 a year.

People in the East Midlands were closest to giving an accurate figure, underestimating the true cost at £721 a week – just £74 short of the real figure. But this was still the equivalent of a £3,848 a year shortfall.

There are more than 400,000 people in the UK living in residential and nursing care homes. Of these, almost half pay for care themselves and the rest are paid for, either wholly or partly, by their local authority or the NHS.

Around one in 10 older people with care needs now face care bills of more than £100,000 – and previous Which? research has shown that only one in 10 adults aged 55 or over say they’ve put aside money to pay for care needs as they get older.

Currently, self-funding residents are paying a premium of £1bn a year to make up for a shortfall in council fees as care home fees generally continue to rise, according to care industry experts LaingBuisson – making preparation and research into the likely cost of care more important than ever.

Commenting on the research, Imelda Redmond, National Director of Healthwatch England, said, 'These findings paint a stark picture of just how unprepared people actually are should they need care in their old age. Our own research has shown that the just 1 in 20 people consider themselves fully ready to deal with any future care and support needs.

'When it comes to choosing a care service, people tell us the most important thing is to be able to compare the costs and quality of different local providers. But the current information gap is not making it easy on people, particularly when we consider that these decisions come along at a difficult and often deeply emotional point in our lives.

'The government’s long-planned social care green paper must, as a priority, improve the information out there and actively encourage people to start planning earlier in life. If it fails to address these issues then the current ‘wait and see’ attitude that most people default too is likely to continue.'

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