The government is cracking down on care homes that don’t make fees clear, as a report shows families are being charged even after relatives have passed away.
(Image credit: Credit: JOHN GOMEZ / Alamy Stock Photo)
Care homes must be more transparent about the fees they charge to residents and their families, the government has warned. The message comes after the release of a damning report by the Competition and Markets Authority (CMA) into the hidden charges care homes levy.
One of the most striking features of the CMA's report is the number of care homes that continue to charge fees to families even after the resident has passed away. In some cases, these charges continued for up to a month after the death had occurred. In addition to charging residential costs, some homes even continue to charge nursing fees for weeks after the patient had died.
On top of fees levied after death, many care homes also charge hefty upfront fees that have to be paid before someone moves in. Combine these two expenses, and people can end up paying thousands of pounds for what can be a relatively short stay in a care home. One reader told The Daily Telegraph how she had to pay £2,200 the equivalent of two weeks' fees before her 96-year-old mother could move into the home.
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Her mother died six weeks later, and she was charged a further £2,200 in "after-death fees". In total, she paid £11,000 for her mother's six-week stay. Importantly, the government hasn't said that it will ban these hidden fees merely that it may be forced to change the law if homes continue to hide these charges away.
Consumer group Which has also drawn attention to the fact that some care homes are failing to provide sample contracts when asked of the 50 homes it contacted requesting documents, including a sample contract, only four homes sent out contracts, three of which "included terms that could be considered unfair to residents" (including after-death fees and the right to terminate a contract with just 24 hours' notice for undefined "detrimental behaviour" on the behalf of the resident).
And of 500 people surveyed about their experience with care home contracts, only 54% said that the provider checked to see if they understood the document they were signing.
The government plans to publish a Green Paper "setting out its proposals for reform of the social care system" by this summer. We look at issues you need to consider in the column on the right.
What to expect
Choosing a care home can be a difficult decision, often made under considerable pressure and in a rush as an elderly relative needs immediate care. If you are looking for a home, be sure to take all of the below into consideration.
Upfront fees: how much do you have to pay before your relative can even move in?
Nursing fees: how much does the home charge if your relative needs additional care during their stay?
After-death fees: will you have to keep paying for care after your relative dies? If so, how long for, or is it a set fee?
Residential costs: the average weekly price of residential care was £600 in 2016/17, but that varies across the country. Residential care in London averages around £741, but at the other end of the scale, care in the North West costs around £511.
Finally, fewer than half of those in care homes are fully self-funded, so don't assume that your relative will have to foot the full bill. They could get assistance from their local authority, the NHS or a charity. For more on funding options visit Age UK (AgeUK.org.uk). You may also want to speak to a financial adviser who specialises in care funding.
Pocket money how to tell if you're being ripped off
Prepare to receive a big bill from your energy firm. New rules are being introduced in May that will ban energy providers from billing customers for energy used more than 12 months ago. This will stop energy firms from suddenly landing customers with huge bills, which often come about after the firm has billed on the basis of meter estimates for a long period, then received accurate meter readings and sent out a whopping bill.
However, it's expected that there will be a "surge of such demands before the rules take effect", says Ali Hussain in The Sunday Times. If you receive an enormous bill, don't just pay it. There were 30,800 complaints to the energy ombudsman in 2016, and 75% of those related to bills. The ombudsman sided with the customer in more than half these cases, so don't be afraid to challenge your bill if you think something doesn't seem right.
The Advertising Standards Authority (ASA) has reprimanded four ticket-resale websites for misleading consumers about their prices, reports Laura Snapes in The Guardian. StubHub UK, Viagogo, Seatwave and GetMeIn were not clear about the additional ticket fees and charges they levy at the end of the booking process.
All four companies have been told to improve transparency over pricing, making it clear what the total ticket cost is from the outset, including the booking fee, delivery fee and taxes. Viagogo has also been banned from using an "official site" slogan, as it misled customers into believing it was a primary ticketing site rather than a resale site, said the ASA.
There could be a gap of hundreds of pounds between what different people are paying for the same mobile or broadband contract, according to new data, says The Daily Telegraph. "Some Sky customers claim to be paying just £80 a month for broadband, home phone and TV packages, while others are spending £160 for the same."
If you think you might be overpaying, IsMyBillFair.com allows you to enter details of your household bills and compare costs with others. With details submitted by 7,000 people, you should be able to find out if your tariff is high, so that you can take this to the firm when negotiating.
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Ruth Jackson-Kirby is a freelance personal finance journalist with 17 years’ experience, writing about everything from savings accounts and credit cards to pensions, property and pet insurance.
Ruth started her career at MoneyWeek after graduating with an MA from the University of St Andrews, and she continues to contribute regular articles to our personal finance section. After leaving MoneyWeek she went on to become deputy editor of Moneywise before becoming a freelance journalist.
Ruth writes regularly for national publications including The Sunday Times, The Times, The Mail on Sunday and Good Housekeeping, among many other titles both online and offline.
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