Prestige Tax and Trust Services were surprised to see that a large proportion of UK care homes remain in the financial warning area. Following a study carried out by Company Watch, it has been revealed that a quarter of the 5,037 care homes in the UK are in trouble financially.
While there has been improvement overall, the sector still reports 1,185 care homes struggling to meet their own financial needs. However, there was an overall reduction of 18% in the number of care homes hitting a financial warning level. These figures are in comparison with a previous study carried out six months ago. According to the study, Company Watch suggests that 23.5% of care home companies will need financial assistance at some point in the future.
Huge concerns currently surround care homes with liabilities that greatly exceed their assets. The number of companies currently in this situation has a negative net worth of £199m. Industry experts suggest that the current business model employed by care homes is not sustainable. Local authorities aren’t in a position to contribute more to the running of care homes and minimum wage is likely to rise by 3% this autumn, which means even higher outgoings. With the continued pressure of rising energy prices, care homes are really going to struggling to maintain good standards.
The ageing Baby Boomer generation will raise the demand for beds for some 600,000, stretching resources even further. This suggests that the cost of care is likely to rise to cover the excess outgoings as the economy remains unhealthy. It is vital that people start to plan for the future before it’s too late.
At Prestige Tax and Trust Services, we can advise you on the best way to save and invest your money, to ensure your assets are protected and you have enough to look after yourself with in your old age. For more information on our services, visit our website.
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