The Rising Cost of Care

It is no secret that the UK, like most developed countries, has an aging population. Whilst life expectancy continues to rise, we know that those experiencing these later years are not always enjoying good health. Thus, the demand for long term care has been steadily increasing for the last few decades. There is no sign of this demand slowing anytime soon. Basic economics determine that higher demand, without equal increase in supply, will lead to higher prices.

Care is split into two main categories:

1.     Medical care, principally provided by the NHS in most instances; and

2.     General care, including help with daily living tasks such as hygiene maintenance, cooking and getting dressed.

With medical care provided by the NHS, there is no explicit cost to the recipient. However, it is worth noting that expert commentators widely regard NHS funding to be in a critical state. Therefore, there are question marks over what the service can continue to provide free of charge. What is covered as medical care is already far more narrow than many realise. Unless an individual has complex medical needs then most of their care will be provided by the social care sector.

The Local Authority will ultimately provide care if an individual does not have the means to pay for this provision, but this only applies once an individual has all but exhausted all their assets. To understand what this means, the upper threshold is just £23,250 and the lower threshold is £14,250. Fortunately, these figures are set to rise to £100,000 and £20,000 respectively from October 2025. At present, there is no cap to the amount an individual could have to contribute. However, also from October this year, a cap of £86,000 is being introduced but no credit will be applied to costs incurred before October. The cap will also not apply to any non-care costs such as accommodation or food so the accumulated cost over time could still be significant. The cynic might expect ‘other’ care home costs to increase a bit faster to make up for the cap!

Figures by provided by Lottie.org, a care home comparison company, at the end of 2024 show the average cost of care in the UK is £1,387 per week (£72,124 per year). Neither London (£1,401 pw) nor the South East (£1,419 pw) was the highest cost region. Surprisingly, Wales took that accolade at an average cost of £1,435 per week (£74,620 per year). Scotland was the lowest cost region with an average cost of care of £1,386 per week (£72,072 per year) but it is worth highlighting that there is relatively little difference between the regional averages. These figures are for general care but if dementia care or specialist nursing care that is not provided by the NHS is required then this comes at a premium. The national average is £1,585 per week, a whopping £82,420 per year. Even more eye watering is if 24-hour live in care is required; then £2,000 per week is a typical cost but we have seen cases of nearly double this outgoing. On the opposite end of the spectrum, if an individual only needs a few hours of assistance during the week then domiciliary (drop-in home) care of five hours a week may cost around £7,280 a year – a stark difference.

It is only a few years ago that I was modelling long term care costs at a cautiously high figure of £60,000 per year. Care costs have historically risen faster than inflation, in main due to the average increase in health care workers earnings (see Annual Survey of Hours and Earnings tables [ASHE 6115 for carers]). Recent high inflation has also caused general costs to rise for food and energy which will contribute to the overall impact. Whether the trend for care costs continuing to rise faster than inflation is sustainable is yet to be seen. However, with the Budget’s announcement on National Minimum Wage increases and increased employer National Insurance contributions, it is likely that costs will only continue to go up.

Planning for long term care is never a rosy topic for discussion but a head-in-the-sand approach is definitely not the answer. There are a number of tangential topics which deserve their own articles, not least the highly relevant discussion about euthanasia, and we welcome your input on areas that you would like us to explore further. We are here to support you with practical advice on the difficult issues that are raised.  We want you to feel confident in our ability to provide sensible and timely input as you or your family members embark on this journey.