My time as a Financial Planner is increasingly being spent helping guide clients through the challenge of care fees planning.
With an ageing population, and people living longer but not necessarily healthier lives, the number of us requiring long-term care in later life is rising quickly.
For many, care in their own home will be the right solution.
This is officially known as Domiciliary Care and helps older people live independently in their own homes in later life.
A new survey by the United Kingdom Homecare Association (UKHCA) has found that hundreds of home care providers will reduce the care they provide or shut up shop completely in the next year,
The survey of 492 home care providers found that only 38% felt confident they would still be trading in a year’s time.
A further 11% said they would ‘definitely’ or ‘probably’ have ceased trading by September 2016.
These gloomy predictions are the result of a number of factors, including the low care fees paid by local authorities and a lack of additional funding for the recently-announced ‘national living wage’ policy.
The national living wage will introduce a new minimum wage of £7.20 an hour for workers aged 25 or over. It is being introduced in April 2016.
As things stand, no extra local authority funding has been announced to help home care providers meet this additional wage costs.
Within the UKHCA survey was the finding that of those home care providers dealing directly with local authorities, 74% would look to cease or reduce their care supply due to the new national living wage policy.
Should these survey findings prove accurate within the next twelve months, it would mean half of all people receiving care from these providers would be affected. This includes those who pay for their own care, known as self-funders.
We get to find out next month the results of the government spending review, which could include details of any additional funding made available for the national living wage policy.
With local authorities already facing substantial pressure on care funding, we expect to see a difficult twelve months ahead for all care providers, especially those reliant on their contracts with local councils.
When choosing a care provider, whether for at home care or care in a residential home, it is essential to consider the financial strength and long-term viability of that provider, to ensure the person receiving care can benefit from consistency of care provider.
Do get in touch if you have any questions about funding your own long-term care and what pitfalls to avoid.
