Private clients in care homes are charged more than those paying under local authority arrangements, a situation set to worsen, Partnership has found.
The retirement funding specialist said those in private, self-funded care are typically paying £631 a week, while local authority care works out to £519 a week - an average difference of £111 a week, or £5,796 a year.
Chris Horlick, Managing Director of Care at Partnership said "It is common knowledge within the care home business, that self funders usually pay more than state funded residents in the same home for the same type of room and the same level of care."
"Many care homes depend on this, particularly in locations where care home margins continue to be under pressure. Proposed local authority budgets cuts can only add to this pressure."
Partnership admitted ‘self funders' (those people with over £23,250 in assets in England) tend to go to care homes which charge premium rates, or occupy the better rooms - but it is not the only reason.
"This is unfair and is a pressing issue for Government particularly as the oldest in our communities, who most need care are growing rapidly. This is an issue that we would wish the funding Commission to review as a matter of urgency." added Horlick
Last year, out of the 53,000 people who had to pay for their own care fees in the UK, only 7,000 people received appropriate financial advice.
Partnership estimates that in 2009 local authorities in England had to pay nearly £1 billion to cover the care costs of people who ran out of money and had to fall back on the State. If unchecked this will increase 20 years time to £2.75 bn.
"Many self funders are unaware of the cost of care or financial products that are available to help them meet their care fees. Educating these people how to harness professional financial advice must be a priority," said Horlick.
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