The cost of care fees is rising, up by 2.2% in the South East of England during the past year.
According to new figures published by Prestige Nursing + Care, average care fees in the South East are now £33,488 a year.
This region has fared much better for care fees inflation than some others; care fees increased 3.5% in London, 6.1% in the South West and 10% in the East of England.
The East of England has now become the most expensive region for care fees in England.
On a national basis, care fees rose by an average of 2.5%, an increase which outstripped pensioner incomes which increased by an average of 2.2%.
In our experience, care fees inflation often rises faster than incomes or average price inflation.
As a result, average care fees now stand at double average pensioner incomes.
According to Prestige Nursing + Care, the average bill for a single room in a care home is now £29,389, a rise of £723 in a year. Pensioner incomes are just £14,300 a year.
There are a couple of important things to consider.
Where a shortfall exists between income and care fees, there are several ways to fund this gap.
Some people choose to purchase an immediate care annuity; this works by exchanging a capital sum (the cost of the annuity is determined after medical underwriting) for a regular income for life, tax-free when paid to a registered care provider.
The other important thing to consider is that care fees are likely to continue to outpace price inflation in the future.
While care fees are typically paid only for a relatively short number of years, they can in some cases be paid for sufficient time for inflation to become a serious issue.
Inflation should be factored in to any care fees planning which takes place, using reasonable assumptions to ensure you do not run out of money resulting in a forced move to another care home.
