A recent report by the Equity Release Council (ERC) highlighted the ongoing funding crisis of the UK's adult social care system, which is arguably our most pressing domestic issue.
There are many reasons why our social care provision is on the brink of collapse, from funding not keeping pace with demand, to a lack of care beds and care practitioners – all of which has been exacerbated by the COVID pandemic.
It is estimated that 75% of us will require some form of social care during our lifetimes. Moreover, the annual cost of residential care ranges from £27,000 to £39,000 annually and rises to between £35,000 to £55,000 if nursing is required.
The obvious question is then, with most of us likely to need care needs of some sort, and the cost to provide it beyond the scope of local authorities and most individuals alike, where is the money going to come from?
Our current system places the financial burden unfairly on the shoulders of those in need of support, at a time of life when we are likely to be at our most vulnerable. The demand is that those with savings above a very modest £14,250 must contribute towards, and those with savings above £23,250 (in England) must fully fund their care needs.
But for many older people, moving into residential care isn’t something they want to contemplate. In fact, the ERC report highlighted that 76% of those over 70 wanted to stay in their own homes in later life, the most common reasons being:
- There is a strong emotional bond with the family home, local social and support networks built up over the years.
- There is a lack of trust in ‘the system’. 63% of UK adults think that our care system is too expensive, lacks public funding (64%) and is not fit for purpose (57%).
- Homeowners do not want to be potentially forced to sell their property to pay for residential care costs if funds dry up, impacting the inheritance they had planned for their loved ones.
Modern-day pensioners need a hybrid model of care
For retirees who are not eligible for financial help from their council (only retirees with less than £23,250 in assets ), the natural step is to look towards a hybrid model of care which involves at-home care for nursing and home modifications to make their home more manageable.
The hybrid model of at-home care and home modifications could be a smart choice in today’s social care climate. Not only does this protect a homeowner’s valuable asset (their property), but it also provides retirees with a better quality of life, typically more affordable care costs and could protect an inheritance for loved ones.
It sounds like a positive prospect - but how much will ‘home help’ cost you? We’ve pulled together the most popular at-home care options and the most essential home modifications to see how much you could save vs choosing a care home.
Home help options for retirees
There are various home care options available for retirees, such as live-in carers, daily/hourly home care and at-home gardeners. Each option, below, provides flexibility for homeowners so they can tailor care to suit their needs and budget.
Live-in carers are a choice for those with health issues who require regular one-on-one assistance. By taking this option, carers temporarily move into the home to help with all manner of nursing and personal care issues.
While the average annual cost of a live-in caregiver comes in at around £44,000-£54,600 per year, 24-hour carers normally work to a daily or weekly rate. The average daily and weekly rates are listed below:
- For companionship only - £120 per day/£850 per week
- For nursing - £150 per day/£1,050 per week
- For nursing complex needs - £170 per day/£1,200 per week
Flexible home care
If family are also able to assist, more flexible daily or hourly home care might be a more affordable option for those in later life. Flexible home care costs around £22,000 on a 28-hours per week basis but can vary depending on the kind of assistant you need.
If you’re unsure, take a look at Age UK’s directory to find a home help service in your area. For clarity, hourly and daily home care costs are listed below:
- For standard hourly care - £15-£25 per hour (for additional nursing, costs are a little higher at £20-£30 per hour)
- For standard daily care - £45-£200 per day (depending on the hours paid for)
Many retirees who stay at home in later life often seek the help of gardeners to manage everyday outdoor tasks, such as mowing the lawn and watering plants. Homeowners usually require their services once a fortnight for general upkeep.
Costs vary depending on the location, size of the space, and number of gardeners, but average hourly figures for a single gardener are as follows:
- For maintaining small gardens – £10 per hour
- For maintaining medium gardens - £14 per hour
- For maintaining large gardens - £25 per hour
Specific gardening services will cost significantly more, with many gardeners charging per project. Prices are scaled depending on the level of work needed:
- Garden waste removal - £100-£200
- Staining fences - £100-£200
- Exterior painting - £700-£1,000
- Patio installation - £800-£2,000
- Decking installation - £800-£2,000
Total cost for home help
For the average retired homeowner who enlists flexible home care costs for a 28-hour week (4 hours per day), hires a gardener every two weeks for two hours, and has them complete one gardening project per year (we have chosen exterior painting in this instance), the total annual cost for home help is £23,578.
That’s a potential annual saving of up to £11,422 vs residential care – with the added benefit of still living independently in your own home.
Home modification options for retirees
For those with reduced mobility, home modifications may provide homeowners with a more manageable and comfortable space, in which they can better enjoy their golden years.
The good news is that local councils should pay for minor home adaptations that cost less than £1,000. The bad news? Many essential fixtures and fittings cost significantly more and, in this case, you’ll need to find the money to fund them yourself.
Below are some of the most essential home modifications for independent living, and their average costs:
- Widened doorways for easier entry - £1,500
- Stairlift - £3,200
- Walk-in bath (inc. bathroom handrails) - £3,200
- Accessible kitchen (lowering countertops, ovens, etc.) - £4,000
Total cost for essential home modifications
Altogether, it could cost a total of £11,900 to install home modifications. As they are usually a one-off fee, you won’t need to roll this into your annual budget – once the project is done, it’s done and you’re free to enjoy your newly navigable home!
Home help vs care homes: what offers the best value for money?
Home help, where practical, is more economical than residential care in the long-term. Not only do homeowners pay less for care per year, but there is the added benefit of remaining in a much-loved property for many more years. If that property increases in value over time (as property forecasts suggest they will) then homeowners stand to leave a significant inheritance for their loved ones, with rising house prices potentially offsetting some of the cost of care at home.
How to fund at-home care
Even with the savings of choosing at-home care vs a care home, many pensioners may, understandably, still be struggling to fund their way towards a comfortable retirement. But that shouldn’t mean those retirees experience a lower quality of life – and that’s where equity release can help.
Equity release enables homeowners over 55 to access some of the money that is locked within the value of their home, all while continuing to own and live in their property. Homeowners do not have to downsize to make ends meet nor are they forced to sell their home to pay for care fees. Released cash is tax-free and can be used by the homeowner to fund at-home care, specialist nursing, gardening projects, essential home modifications, or for any other reason.
Thankfully, equity release plans have never been more flexible, meaning you can choose when to withdraw cash as and when you need it. Drawdown plans, for instance, allow you to withdraw funds monthly - if necessary. (Please note that an initial amount of at least £10,000 must be borrowed and lenders have different criteria when it comes to how often and the minimum they will allow for ongoing drawdowns.)
An advantage of a drawdown lifetime mortgage is that is has the potential to keep savings below the Government thresholds, so that any means-tested benefits can continue to be claimed.
For more information about equity release, head over to the Equity Release Supermarket website.