Lisa Morgan is head of the Nursing Care Recovery Fee team at Hugh James (Image: Clare Longhurst)
Care homes owners have raised serious concerns about the financial pressures resulting from the recent rise in employer National Insurance contributions and the increase in minimum wage. Some owners have warned that these added costs could force them to close.
While NHS and public bodies are exempt from the NI rise, private care homes – many of which provide services for the NHS – are not. The rising cost of care in the UK is a growing issue; it has surged by 10% in the past year alone, pushing average annual fees to over £41,600 for a residential care placement and over £56,000 for a nursing home placement.
Given this trend, it is inevitable that the increase in National Insurance contributions will drive care fees even higher, placing further strain on families already facing escalating costs.
The Government has framed these changes as part of a broader strategy to tackle inflation and fund public services.
However, for many care home residents and their families, it is likely to be more challenging. The rise in employer NI contributions directly impacts the operating costs of care homes, many of which are already struggling with rising energy bills, staff shortages, and general inflationary pressures. In response, care homes are likely to pass on these additional costs in the form of higher fees.
However, the financial burden of care on families can be lifted for those who qualify for Continuing Healthcare (CHC) – a package whereby the NHS has a legal obligation to pay the full cost of their care where a person’s primary needs are health-based.
Whether a person receives CHC however, depends on how the person is assessed. Increasingly stringent assessment criteria and a postcode lottery mean people are being wrongly assessed by the NHS – 30% of those who should be entitled to CHC are turned away. Many people are therefore missing out on the financial help that they are legally entitled to.
The Government must recognise that the care sector is at a critical tipping point. Without targeted financial support for care providers, there is a real risk of erosion in standards, exacerbating the difficulties faced by vulnerable people. It’s essential that future policy decisions include dedicated measures to protect both the quality of care and the affordability of care home services for all those who need them.