Older is Wiser – Funding care from your own pocket?

Ray Hart reveals 8 tips that could save you money on long-term care costs

For self-funders the long-term costs of moving into a care home can be bewildering. Ray Hart, creator of Valuing Care Fees Calculator, highlights the key points that could help save you money. If you’re not eligible for local authority funding for long-term care, you’re not alone. More than 40 per cent of placements in independent care homes in the UK are privately funded. As private individual buyers, people are most likely to pay for a placement from the proceeds of selling their homes along with their accumulated life-savings, and as such are only too aware that life in a care home is an expensive prospect 


With average costs of care topping £500 per week, saving money out of your own pocket is a welcome concept.  Unfortunately self-funders are largely price-takers; accepting fees without trying to influence the price of an individual placement.  Furthermore, the first available space in a care home is often accepted; limiting the ability to save 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.

Adjust the 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.  

Correct 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.

Switch provider
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.

Personal Space
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 ensuite. There will also be additional supplements for different categories of rooms such as those with an ensuite, sea view, or a larger room for couples for example 

Organisations should develop an insight into the cost components that make up the price. For instance how many staff, and at what grade, are on shift, and what is the likely hourly rate for each staff type. CCGs that have robust models and banding levels for determining rates for services, which reflect the needs of the patients, will have an advantage here. 

Some CCGs find it useful to create framework agreements to inform providers of the value for money price they would expect to pay for a service. There are also many tools and models you can use to create an activity-based cost for individual packages, enabling commissioners to compare quotes against national averages. If the rate is as too high, it is time to negotiate. 

Fancy facilities
The additional facilities that care homes provide varies enormously.  Whilst some are very modest providing basic facilities such as homely lounges and quiet gardens, others boast seemingly endless offerings; 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

Back to basics
Whilst 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. 

Know what’s 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 Valuing Care Fees Calculator to give 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; you can save thousands of pounds.  

Call the professionals
Specialist care fees advisers, the trade term for independent financial advisers who specialise in care funding, provide support and advice in this area. Their expertise covers all aspects of care fees funding so they are an invaluable point of call if you need extra guidance.  These are paid for services, but in the long run could save residents more money. 


2nd September 2013