Why Are Care Homes So Expensive? Fees Explained

It’s true that care home fees are on the pricey side, with 91% of UK Care Seekers saying they think care homes are expensive.

On the surface, it can be difficult to work out exactly why care homes cost so much, but luckily Lottie are here to help!

In this article, we look into the ins and outs of care home costs. We will explain exactly what your fees will cover, plus some useful tips for saving money on your fees.

Types of Care Home

For starters, different types of care homes have different costs. A standard residential care home is likely to cost less than a more specialist home. Nursing homes, dementia care, or an expert level of care for certain health conditions will likely cost more.

Fees will also depend on the size of the care home, its location and the range of facilities it offers.

What Does a Care Home Cost?

Care home costs vary across the board and tend to be more expensive in certain countries and regions. Costs are also affected by the type of care needed.

For example, the average weekly cost of self-funded residential care is £1,408 in England, £1,386 in Scotland and £1,435 in Wales. Within England, weekly residential care is most expensive in South West England (£1,419) and least expensive in North West England (£1,397).

Across the UK as a whole, weekly residential care is the cheapest type of permanent care, costing an average of £1,387, while nursing dementia care is the most expensive, costing an average of £1,585.

Source: Lottie's internal data, based on the care homes we're partnered with.

Why Are Care Homes So Expensive?

The answer is pretty simple: Care homes cost a lot because they provide 24-hour personal care for residents, 365 days a year, in addition to nursing care or specialist care in some cases. 

Individual residents require regular meals, which can include catering for special diets, and personal care – which can include assistance with washing, dressing, toileting and care for specific medical needs. 

Nursing staff must be on-hand round-the-clock to provide these care services, as well as catering and cleaning staff who cook the meals, do residents’ laundry and clean the home.

What the Fees Cover

Care fees can be broken down into several main categories including rent and bills, care costs and food. There may be additional charges for things like haircuts, phone bills or hospital call-outs, as well as visits from GPs, physiotherapists or other healthcare professionals. Some care homes charge for day trips, excursions and activities for residents while at the home, such as concerts, visits from speakers or entertainers, birthdays and events.

Care Seeker’s main issue with care home fees seems to be that getting a straightforward cost breakdown can be really tricky. In fact, 94% of Care Seekers in the UK believe that care providers are not transparent with their pricing – with many reports of hidden fees, additional costs for services and facilities and even sudden fee increases. 

When you are starting your care home search, ask for an honest and up-front summary of a care home’s fees and always read any contract you are given thoroughly before signing.

How Much Money Do I Need?

In the UK, your financial circumstances are taken into account. If you or your elderly parent have savings equivalent to or greater than £23,250 in England and Northern Ireland, £35,000 in Scotland and £50,000 in Wales, you will qualify to pay fees for your own care.

Our 2024 Care Seeker Survey found that the proportion of people who use personal savings to pay for their own care has significantly increased since 2021, from 41% to 65%. This was most apparent in England, where funding thresholds are the least generous to care seekers.

Any assets you own, including the value of your own home, may be taken into account. If you don’t have the required amount, you may be viable for financial support from your local council, who will partly or fully cover the costs.

If your local authority is funding your care, a third party can also volunteer to pay a top up fee to make up the difference if you require a more expensive care home. Your ability to pay for your care home is usually determined by a means test or financial assessment.

How to Save Money

When we look at the UK’s continually ageing population and the increasing amount of older people, it comes as no surprise that around 80% of us will need some sort of care by the time we hit our eighties. It’s therefore important to be prepared for the inevitable costs of this care.

Reading up on the funding and benefits you may be entitled to from your local authority can help you to knock some money off your fees. Such benefits include Attendance Allowance, NHS Continuing Healthcare and NHS-funded nursing care, Pension Credit and Savings Credit. 

You can learn more about Attendance Allowance pitfalls and mistakes to avoid when applying.

You could also look at downsizing your home or using the 12-week property disregard to grab yourself a few more pennies. If you are able to, saving for a rainy day throughout your adult life can make all the difference when it’s time for you or a loved one to go into care.