Thousands of older people at the mercy of care home price rises

As many as 22,000 older people living in care homes in England get only a week’s warning that their care costs will rise, a new report from Citizens Advice finds.

Citizens Advice’s analysis finds that yearly care home fees increased on average by £900 across England in the last financial year. In one region residential care home fees rose over £2,000 on average in the same period.

Whilst care home fees are usually based on a weekly rate, and often paid for monthly by direct debt, a mystery shopping investigation of 404 care homes across England reveals that almost 1 in 10 (8 per cent) only give a week’s notice that their fees are going to rise.

This means that after the week’s notice that costs will go up, residents have to start paying the higher price, which could cost them an average of £52 extra a month.

With many older care home residents or their families paying for the care out of finite pots of money saved up for retirement, cost increases can lead to debt in some cases or, at the extreme end, see residents threatened with eviction if they can't afford the additional costs.

The number of residential care problems Citizens Advice supported people with in 2015 rose by 12 per cent to 8,700. The charity also helped with 18,000 community care problems last year, a 5 per cent rise on 2014.

In its new report, Hidden Charges in Care Homes, the national charity asserts that residents or their families have little alternative but to pay any rise in fees because a week does not give them enough time to establish if the fee rise is fair and to negotiate with the provider if it isn’t.

The report highlights that giving residents or their families only one week’s notice before they start incurring extra costs is impractical for those who may need to look for alternative care homes which are less expensive. Moving is often not a viable option because it is too disruptive or distressing for the resident, meaning people have little choice but to pay the higher fees.

Citizens Advice’s research into the care homes market also reveals people paying for care can be made to pay extra, undisclosed costs, either when they first enter a care home or arbitrarily over the time of their stay. These costs are in addition to weekly fees but often are not made clear at the point that people sign the initial contract.

Citizens Advice finds:

• Having someone accompany the resident on visits to the GP or the dentist can cost as much as £50 an hour. 
• Three out of ten care homes (30 per cent) do not include contents insurance for people’s personal items in weekly care fees.
• Two thirds of care homes (67 per cent) do not include telephone use in weekly care fees.

Gillian Guy, chief executive of Citizens Advice, said:

“People in care homes are at the mercy of price rises.

“A week’s notice puts enormous pressure on care home residents or their families to pay. It is unreasonable for vulnerable people to face such a small window to compare costs and make alternative arrangements if they cannot afford the higher fees.

“Some people are also being caught out by hidden extra care fees appearing on their bill. Nobody can be expected to budget for extra costs that are not clearly set out by the provider.  

“There should be a minimum amount of time care homes can give notice of a price rise and the Competition and Markets Authority should look into whether the care home market is working well for people paying for its services. Clearer guidance is also needed on extra care costs so those paying are not landed with shock bills.”

Guidance on unfair terms in care home contracts was last updated by the CMA’s predecessor, the Office of Fair Trading (OFT), in 2003.

The new report recommends:

• Residents or their families to have four weeks notice at the very least that their care fees will rise.

• The Competition and Markets Authority (CMA) looks into whether the care home market is working well and whether people are really able to choose freely between providers.

• A simpler process for people to complain about poor experiences in a care home.

Notes to editors

1. 22,000 is an estimate based on of the number of people aged over 65 living in English care homes. According to the 2011 Census data, 274,040 people aged over 65 live in a care home (including residential and nursing care homes). The estimate is based on the 8 per cent of care homes that told mystery shoppers they only provide a week’s notice for a fee increase.
2. On behalf of Citizens Advice mystery shoppers contacted 404 care homes in England (including residential and nursing homes) that provide care to older people by telephone over the period from 4th November to 18th November 2015. The research was co-ordinated by BDRC research agency. Mystery shoppers used the same scenario for each care home.
3. Citizens Advice analysis of 2015 LaingBuisson data reveals nursing home care fees rose by £1,872 and residential care home fees by £572 on average from 2013/14 to 2014/15. The calculation is based on 17,350 care homes operating in England in 2014, of which 4,374 provided nursing care. Citizens Advice estimated that someone paying monthly by direct debit could pay £52 on average over three weeks.
4. The Citizens Advice service comprises a network of local Citizens Advice, all of which are independent charities, the Citizens Advice consumer service and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more see the Citizens Advice website.
5. The advice provided by the Citizens Advice service is free, independent, confidential and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.
6. To get advice online or find your local Citizens Advice in England and Wales, visit citizensadvice.org.uk
7. You can get consumer advice from the Citizens Advice consumer service on 03454 04 05 06 or 03454 04 05 05 for Welsh language speakers.
8. Local Citizens Advice in England and Wales advised 2.5 million clients on 6.2 million problems in 2014/15. For full service statistics see our publication Advice trends.
9. Citizens Advice service staff are supported by more than 21,000 trained volunteers, working at over 2,500 service outlets across England and Wales.