Worried about care home fees? How negotiating could cut costs and save thousands
Many people who move into care homes do so at a time of great stress, often following a period of illness. Usually, they don’t think to scrutinise the price charged by their care home until it’s too late – but even a discount of £50 a week can save thousands in the long-term. Ray Hart, creator of the Valuing Care Fees Calculator, talks This is Money through the best ways to negotiate costs.
Which kind of care home fees are negotiable?
Most people who are planning on privately funding a residential home move will be looking for residential or nursing home care – both of which are negotiable. You normally agree a contract directly with the care or nursing home, which also sets aside a certain number of places for those that can’t afford to pay and are being supported by their local authority.
However, you may be charged substantially more than the local authority pays, because councils block book a sizeable number of places and can negotiate a cheaper price. However, you can negotiate, too – and if you do, savings can amount to thousands of pounds. At £500 per week, the average length of stay in a residential home would total £60,000, so even a £50 per week reduction could save £6,000 over the duration of the placement.
Are there any that aren’t?
As in any private marketplace, the laws of supply and demand prevail. If you are wishing to purchase a placement in a home with high demand, or a long waiting list, it is unlikely that you will be able to make a saving on the purchase price.
Alternatively, it may be that the home offers additional services above the standard care that may justify that additional fee.
If that is the case and you use the services of a care fees specialist (independent financial advisers that specialise in the care industry) you will still have the peace of mind of knowing that the fee that you pay can be justified by these extra services supplied by the home.
How do you actually negotiate?
Identify the expected price range
Understand the price range for the area in which you are searching. Free care comparator tools (such as this one) are available to help you.
If you get a quote that’s identified as not providing value for money, now is the time to get bargaining.
Know what you want
Before negotiating, determine your exact needs, such as the level and type of care, and any extra facilities you require.
Get a copy of the contract and ask the manager to confirm exactly what the fees cover, including additional charges.
This varies across care homes. While some have transparent pricing and make residents aware upfront of all potential costs, it may be more difficult to establish with others if only referred to in the small print.
Also, know what price you are prepared to pay for your individual requirements.
Meet with the manager
Ask to speak to the care home manager; the person who can make financial decisions.
Approach negotiations with a clear mind
Be clear on what it is you want, and for what price. Be chatty, and friendly. It should be a positive discussion for both parties.
Consider the alternatives
If price isn’t negotiable, consider added value for the same fee such as a larger room.
Don’t take it personally
Although finding a care home for a loved one is an emotional decision, don’t take negotiations personally if they don’t materialise in the way envisaged.
Keep your options open
If you don’t get value for money from one provider, approach other suitable homes that meet your requirements.
Top tips to keep costs down
Unfortunately self-funders are largely price-takers – accepting fees without trying to influence the price of an individual placement. Most people accept the first available space in a care home, limiting any chances of saving money. However, for those in the early phases of finding the right care home, it is worth remembering that there are ways to reduce costs:
Widen the search area
If you currently reside in an expensive location, think about moderately or lower-priced areas – you may be amazed what a difference adding 10 or 15 miles to the search area makes to the price.
If you’re looking for the lowest price area consider Yorkshire; avoid London, as this is the country’s highest. Generally speaking, places with a beautiful view, such as some of the pretty Cornish coastal towns and villages demand higher fees.
Level of care
Although it’s wise to think ahead, and consider the type and level of care needed in the future, don’t overlook existing requirements. Some people find themselves in a situation where they are paying for unnecessary nursing care.
Always remember that the greater level of care needed, and the more specialised, the more money charged. Hence, nursing homes are more expensive than residential homes.
There are more than 10,000 independent care homes in the UK, and 42 per cent of these are major corporate providers such as Bupa, Anchor Trust, Barchester Healthcare and so on. There are also hundreds of smaller care homes. There is no regulation on prices in the UK, and as such prices vary significantly between care homes, and also between providers.
Although a rarity, for those happy to share a bedroom, or a bathroom with another resident, rates are cheaper than having a private room, or an en-suite. There will also be additional supplements for different categories of rooms such as those with an en-suite, sea view, or a larger room for couples for example.
The additional facilities that care homes provide varies enormously. While some are very modest, providing basic facilities such as homely lounges and quiet gardens, others boast seemingly endless facilities – guest accommodation, libraries, bistros, gift shops, and beauty rooms, to name a few. As with anything in life, nothing is free, so expect rates to reflect provision of services.
If you’re not going to make use of certain facilities, it may be worth revising your search.
While optional activities or extras may be included in the fee at some homes, it’s best to check as others will charge, so clarify this with the care home manager. If they do charge, understand what the charges are for and how much they will be.
This may include items such as newspapers, transport or hairdressing, or activities such as boat trips, sightseeing trips, or cookery clubs. All of these extras could add up to an unexpected bill at the end of the month.
Is it value for money?
Unless you work in the industry, it’s difficult to know whether you have received a value for money quote. Use a free comparator tool such as this one to get a guideline on the level of fee that should be charged for that area. Alternatively, local authorities can assist.
If you think you’ve been quoted an unreasonably high rate, negotiate with the care home manager.
Specialist care fees advisers, the trade term for independent financial advisers who specialise in care funding, provide support and advice in care home costs. Their expertise covers all aspects of care fees funding so they are an invaluable point of call if you need extra guidance.
Although these are paid-for services, if you don’t know what you’re doing, in the long run they could save you more money.