Retirement communities provide triple boost to finances
03 February 2019
- New research shows running costs for a Retirement Living apartment are much lower than a customer’s previous home, typically saving c.£1,200 a year
- Homeowners in a retirement community could also save almost £13,300 per person per year in care costs compared to a residential care home
- Living in a retirement development saves the state £1.7m over a ten-year period in public health and care costs by improving people’s health and happiness
- Findings come as fewer than one in seven people have confidence in the public social care system
6th February 2019: Moving to a retirement community could save older people tens of thousands of pounds compared to running their previous home or moving into residential care, according to McCarthy Stone, the UK's leading developer and manager of retirement communities.
New research by the company has found that there are significant savings to be made when moving from a typical house to a Retirement Living apartment, the most popular form of housing provided by the company. The typical net saving on costs from living in a McCarthy Stone Retirement Living apartment compared to the costs of running a three-bedroom house is £100 a month, or £1,200 per year, which adds up to a saving of £12,000 over a ten-year tenure.
This is a result of lower heating, water and other utility bills, including council tax, as well as lower home insurance and the procurement of more efficient and effective day-to-day services by McCarthy Stone. Given the company’s national purchasing power, it can source cheaper buildings insurance and maintenance services such as window cleaning and gardening. Many of these savings are a result of living in a smaller apartment, but also stem from high building and insulation standards employed by the company.
In addition, customers also benefit from services that they did not receive in their previous home, such as the House Manager who looks after the development, acts as a ‘friendly neighbour’ and helps to arrange many of the social activities, as well as a 24-hour call system. Service charges for a Retirement Living apartment typically start at just £2,160 a year and cover many of these services in a single bill.
McCarthy Stone’s Retirement Living Plus developments, which provide additional services such as an on-site 24-hour care service and a restaurant or bistro, can save customers even higher sums.
With residential care home costs often totaling more than £32,000 a year according to research by Laing Buisson, the type of independent living with on-site care provided by Retirement Living Plus developments, a form of Extra Care housing, can be a much better alternative.
Service charges in Retirement Living Plus developments are significantly lower than a residential care home, typically starting at just £6,840 a year . This cost includes subsidised meals, the availability of the Estate Management team 24-hours a day, one hour of domestic support each week as standard and many other day-to-day running costs. Even for those with higher care needs requiring eight hours of care per week, living in a Retirement Living Plus scheme would cost just £18,730 a year, still significantly lower than the £32,000 a year cost of residential care.
Living in a McCarthy Stone Retirement Living Plus apartment could therefore save someone almost £13,300 a year (£13,270) in care costs. This is equal to over £26,500 (£26,540) over a two-year period – the average tenure of a residential care home resident – or almost £80,000 (£79,620) over a six-year period, a typical tenure of someone living in a Retirement Living Plus development.
Saving the state money
Retirement communities also help the state make significant savings. McCarthy Stone estimates that £1.7m could be saved in public health and social care costs for each of its developments over a ten-year period, reducing a significant burden on public services.
It is well-known that the pressures placed on health and social care are immense and only going to worsen as the population continues to age.
However, building more suitable housing was viewed as an important factor in improving adult social care services in McCarthy Stone’s research recently carried out in conjunction with YouGov. Of those surveyed, 82% gave this as a solution.
The research also found that there is a distinct lack of satisfaction with social care with adults aged 65 and over holding negative views – a view that is only getting worse over time: just 14% of those surveyed saw it as good. This is down from 18% in 2017 and puts confidence in social care at below one in seven.
John Tonkiss, Chief Executive Officer at McCarthy Stone commented on the findings:
“Retirement communities enrich the lives of older people and help save them thousands of pounds in living costs. There is a perception that this form of housing can be expensive, but our research shows how it reduces our customers’ running costs compared to their previous home. For those needing more care and support, is also a much more attractive alternative to moving to a care home.
“The UK’s rapidly ageing population is bringing a new housing crisis to the fore, and the demand for specialist retirement accommodation is becoming more acute. Creating more retirement communities is crucial as the UK looks to support an ageing population and must be a critical part of the solution.”
Case Study: Robert Gorley, 72, who lives in Brindley Gardens, Codsall, Staffordshire
Robert Gorley lives in a two-bedroom McCarthy Stone Retirement Living apartment in Brindley Gardens, Codsall.
Talking about the associated costs, he commented, ‘’My service charge of £260 per month covers, amongst other things, the services of our House Manager and the maintenance, decoration and upkeep of the buildings and grounds. It is a weight off my shoulders to be freed of responsibility for those things and for such unexpected eventualities as mending fences or repairing roofs.’’
Mr. Gorley’s energy costs are lower at around £75 per month compared to £120 per month previously, and his buildings insurance and water charges are contained within the service charge. His Council Tax also is considerably less at £75 per month compared to £150 per month before.
‘’We have a House Manger on hand five days a week to help arrange social events and as a first point of call if any support or assistance is required,’’ says Mr. Gorley. ‘’The House Manager will also keep an eye on my flat at such times as I am away, which is a big plus’’
‘’I have found McCarty & Stone to be an excellent landlord. They are attentive and competent and can be readily accessed through the House Manager.’’
‘’Overall, I am very happy with the financial and managerial picture. The sense of security and the freedom from unexpected expenses and responsibilities is most welcome. The service from the House Manager and landlord is professional and the standard of fixtures and fittings in my apartment and the design of communal areas is very good. I feel that I am getting value for money.’’