Up to 31,000 residents in care homes across the UK face an uncertain few months as Southern Cross aims to renegotiate rents in order to improve its finances.
Southern Cross is the largest care home company in the UK with 750 homes.
It recently reported half year losses of £311m.
The proposal made to the landlords owning the care homes they operate is to pay nearly a third less over the next four months.
This 30% rent deferment period would run from 1st June to 30th September, with an update on the situation due to be issued by Southern Cross in July.
There is of course no obligation for the property owners to accept these proposals. Whilst Southern Cross is confident that a ‘critical mass’ will accept lower rental payments over the next four months, others may simply refuse.
Our care fees specialist and Chartered Financial Planner Angela Murfitt commented:
“Many of those in care who are self-funding will be paying for their care using Immediate Care annuities which if paid directly to the providers of their care, are of course tax free.
“There is usually no issue in transferring these payments to another registered care provider and therefore worries on this front at least, can be alleviated if ultimately those in care need to move to other homes.
“Unfortunately the emotional costs to those affected who have to move homes, cannot be so easily counted.
“There appears to be little option at present but to sit and wait for an outcome although concerned families should check with their Immediate Care Fees provider to establish the procedure for transferring payments to other providers so that they can act quickly if necessary.”
Do get in touch if you have any concerns about the Southern Cross situation or if you are considering a care home for a relative. You can find out more about care fees planning at our specialist microsite at www.mycarefeesadviser.co.uk.
