Half of older care home residents pay their own fees

Across the UK, nearly half a million people live in care homes and a significant proportion of them are paying their own charges.

People move into care homes for a variety of reasons, such as old age, health conditions and disabilities. For many older residents, particularly those with dementia, a residential care setting could be their home for several years.

As the cost of later life care is not covered by the state in the same way that health costs are, it's something that should be taken into account when planning your retirement.

Figures from the Office for National Statistics (ONS) show that there is a 50/50 split between self-funded and state-funded residents in care homes for older people.

Overall, just over a third (36.7%) of care home residents in England are paying their own charges. This rises to around four in 10 (39.2%) for care homes providing dementia care and just under half (49.6%) among those in care home for over 65s.

The ONS estimates that around 135,000 people in England are currently self-funding their care in homes for older people or those providing dementia care.

With new rules around funding care set to be introduced by the UK government, financial advisers will have a key role to play in helping people who are paying for their own care to navigate what is still likely to be a complex system, according to Just Group.

Recent research by the retirement specialist found that the majority of over 45s (52%) approaching a local council to arrange care for themselves or a loved one would find a referral to a professional financial adviser helpful in planning how to meet care costs.

Over a quarter (26%) would then arrange to meet a financial adviser, 16% would make contact over the phone and 14% said it would prompt them to speak to their own adviser. Only one in seven (14%) said that they would choose not to speak to an adviser if they were referred to one.

"The evidence shows there are well over a hundred thousand people funding their own care in homes for older people or those suffering from dementia," commented Stephen Lowe, group communications director at Just Group. "Organising care is an onerous undertaking and requires good knowledge of the funding and benefits system and how they can affect an individual's financial circumstances."

Financial advisers can play an important role in encouraging people to consider care costs so they have a plan in place, Lowe explained.

"Currently, advisers are not at the front of people's minds when people think about where they might seek support, with just 13% saying they would seek the help of a professional financial adviser. However, when prompted with the idea of a referral to an adviser by their local authority only one in seven said that they would turn down the opportunity."