Homeowners could lose as much as 56% of the capital of their home to supplement their care home costs, according to latest research by TakingCare Personal Alarms.
Analysing the care home costs in the UK’s top 20 cities, the report revealed that due to the ongoing crisis in the British care home system, costs are dramatically increasing, thus leaving older homeowners at risk.
This loss of property capital not only impacts homeowners, but also their children, with homeowners potentially unable to leave their children money for a house purchase deposit due to the increasing cost of care.
Steve Gates, managing director at TakingCare Personal Alarms, said: “The insights from this data serves to highlight the challenges faced by many older adults around how to pay for their care.
“The need to plan ahead for these costs is more important – and pressing – than ever before, especially considering the rising cost of living.”
According to the Barclays Mortgages’ First Time Buyer Index, Brits spend on average eight years saving for a house deposit, but data from TakingCare Personal Alarms reveals that just one year’s stay in a care home will cost Brits more than the average house deposit.
ONS data reveals care home residents typically spend at least four years in care homes, costing individuals on average £113,000.00 – £161,000.00 depending on where they live.
For 12 of the UK’s top 20 cities, including Manchester, Nottingham, Liverpool and Derby, the data found that this cost was more than 50% of the average house price in the area.
Gates added: “In the UK, first time buyers typically save for eight years to raise enough money for a house deposit – but just one year of care home fees costs more than the average house deposit.
“Yet individuals rarely consider care home costs when they think about saving for the future and even fewer actually take the steps to put money aside for their care home costs.”
In October 2023, the Government plans to introduce a cap on care costs for all adults in the UK, meaning that no individual will have to pay more than £86,000 towards their adult care during their lifetime.
