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UK Residential Care for the Elderly market report

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the Residential Care for the Elderly market, and the behaviours, preferences and habits of the consumer.

Mintel has the answers you’re looking for

What are the key challenges facing the industry and how fast are its rates of growth? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

Key areas covered

  • What are the key determinants driving the residential care industry?
  • Was the market affected by the financial crisis and how has it recovered since? Has there been any structural changes as a consequence?
  • How has the government influenced and shaped the development of care homes?
  • What are the key issues the industry needs to address to fully benefit from any favourable market conditions and future trends?
  • What does the future hold for the UK’s residential care industry?

Segmentation

Accommodation Type

  • Residential
  • Homes with Nursing
  • Sheltered Housing

Care Purchaser

  • Local Authority
  • NHS
  • Private

Provider Type

  • Local Authority
  • NHS
  • Independent

Company profiles

  • Abbeyfield Society
  • Anchor Trust
  • Avante Care and Support (formerly Avante Partnership)
  • Barchester Healthcare
  • Bupa
  • Bupa Care Homes (CFG)
  • Care UK
  • Four Seasons Health Care
  • Future Life Group (formerly known as Embrace)
  • HC-One
  • Housing & Care 21
  • Methodist Homes
  • Minster Care Group
  • Priory Group
  • Sanctuary Care

Expert analysis from a specialist in the field

Written by Lewis Cone, a leading analyst in the B2B sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

Higher quality and cost-effective health and social care could be achieved if the NHS and care home operators communicate and engage in discussions on how to improve both health and social care. Lewis Cone
Research Analyst

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Table of contents

  1. Overview

    • What you need to know
      • Covered in this Report
      • Executive Summary

          • The market
            • Market value reaches high in 2018 but growth slows
              • Figure 1: UK residential care market, by value, 2014-18, (£ million)
            • Old age support ratio to continue to decline
              • Figure 2: Old age support ratio, 2018-43, (ratio)
            • Market value to rise by 7% to 2023
              • Figure 3: Forecast UK residential care market value, 2018/19-2022/23, (£ million at 2018 prices)
            • Companies and brands
              • The consumer
                • 68% of people have not thought about how they would fund their long-term care
                  • Figure 4: Residential care payment plans, April 2018, (% of respondents)
                • Nearly a third put performance rating as most important factor behind choice of home
                  • Nearly three-quarters believe that CCTV camera installation would stop negative treatment of residents
                    • What we think
                    • Issues and Insights

                      • Green paper delay leading to uncertainty
                        • The facts
                          • The implications
                            • Provider insolvencies and poor quality of care in homes adding to industry pressures
                              • The facts
                                • The implications
                                • The Market – What You Need to Know

                                  • Market value reaches high in 2018 but growth slows
                                    • Local authority expenditure
                                      • Market value to rise by 7% to 2023
                                      • Market Size

                                        • Market value reaches high in 2018 but growth slows
                                          • Figure 5: UK residential care market, by value, 2014-18, (£ million)
                                          • Figure 6: UK residential care market, by number of registered care homes, 2014-18, (units)
                                          • Figure 7: UK residential care market, by number of registered places, 2014-18, (000)
                                        • Shortage in care home places is starting to arise
                                          • Trend towards larger homes
                                              • Figure 8: Average number of places, revenue per care home and revenue per place, UK, 2014-18, (average number of places, revenue in £000)
                                          • Market Segmentation

                                              • Accommodation type
                                                • Figure 9: Segmentation of the UK residential care market, by type of accommodation, 2014-18, (number of homes, sheltered housing in 000 units)
                                              • Care purchaser
                                                • Figure 10: Segmentation of the UK residential care market, by type of purchaser, 2014-18, (£ million)
                                              • Provider type
                                                • Figure 11: Segmentation of the UK residential care market, by type of provider, 2014-18, (£ million)
                                              • Local authority expenditure
                                                  • Figure 12: Segmentation of local authority-commissioned residential and nursing care expenditure, by provider and client type, 2014-18, (£ million)
                                                  • Figure 13: Segmentation of local authority-commissioned residential and nursing care expenditure, by provider and service type, 2014-18, (£ million)
                                                • Older people (65+) expenditure
                                                  • Figure 14: Segmentation of local authority expenditure on residential care services for older people (65+), by service type, 2014-18, (£ million)
                                                • Adults aged 18-64 expenditure
                                                  • Figure 15: Segmentation of local authority expenditure on residential care services for adults aged 18-64, by service type, 2014-18, (£ million)
                                                • NHS Care Expenditure
                                                    • Figure 16: Segmentation of NHS expenditure on residential and nursing care, by provider type, 2014-18, (£ million)
                                                  • Private care purchasers
                                                      • Figure 17: Private expenditure on residential and nursing care, 2014-18, (£ million and % market share)
                                                    • Sheltered housing
                                                        • Figure 18: The development of sheltered housing in the UK, 2014-18, (000 units and % change)
                                                      • Extra care housing
                                                      • Market Forecast

                                                        • Market value to rise by 7% to 2023
                                                            • Figure 19: Forecast segmentation of the UK residential and nursing care market, by type of purchaser, 2019-2023, (£ million)
                                                          • Shortfall in number of homes and beds expected
                                                            • Technology use could free-up carer time and reduce costs
                                                            • Market Trends

                                                              • Old age support ratio to continue to decline
                                                                  • Figure 20: UK population projections, by age group, 2018-43, (000 people)
                                                                • Care worker and manager turnover rates rise although average wages have generally improved
                                                                    • Figure 21: Annual workforce turnover rates in the adult residential care sector, England, 2016-17, by employee position, (%)
                                                                    • Figure 22: Average annual pay in the adult residential care sector, England, 2016-17, by employee position, (£)
                                                                  • Home care accounts for majority of social care’s delays in transfer of care from NHS hospitals, but residential and nursing care figures also remain high
                                                                    • Cost of the average care home residency has reached a record high
                                                                      • Occupancy rates reach 11-year high
                                                                      • Market Drivers

                                                                        • The ageing population and changes to the pension system will affect the industry’s operating model
                                                                          • Staff costs continue to rise due to the increased NLW and NMW rate, but U-turn over ‘sleep-in’ back pay has provided temporary relief
                                                                            • Implications of Brexit
                                                                            • Legislation

                                                                              • Care Standards Act
                                                                                • Regulation and Inspection of Social Care (Wales) Act
                                                                                  • The Carers (Scotland) Act
                                                                                    • The Care Act 2014 and Better Care Fund
                                                                                      • CQC and Market Oversight
                                                                                        • Pensions Act
                                                                                          • Other legislation
                                                                                          • Companies and Brands – What You Need to Know

                                                                                            • Anchor and Hanover plan to merge to become the largest provider of care for older people in England
                                                                                              • Providers are choosing to construct high-quality homes and retirement villages that target the growing self-funder market
                                                                                              • Industry Structure

                                                                                                • Industry development
                                                                                                  • M&As and other industry movements
                                                                                                    • Market share
                                                                                                      • Changes in the Structure of the Industry
                                                                                                        • Figure 23: Analysis of the changes in the structure of the ‘residential nursing care activities’ industry, 2013-17, (number of local units and businesses)
                                                                                                        • Figure 24: Analysis of the changes in the structure of the ‘residential care activities for the elderly and disabled’ industry, 2013-17, (number of local units and businesses)
                                                                                                        • Figure 25: Analysis of the changes in the structure of the hospital activities - medical nursing home activities industry, 2013-17, (number of outlets and businesses)
                                                                                                      • Structure by employment
                                                                                                        • Figure 26: Analysis of the employment structure of the residential nursing care activities industry, 2016-17, (number of outlets and outlet employment size)
                                                                                                        • Figure 27: Analysis of the employment structure of the residential care activities for the elderly and disabled industry, 2016-17, (number of outlets and outlet employment size)
                                                                                                        • Figure 28: Analysis of the employment structure of the hospital activities - medical nursing home activities industry, 2016-17, (number of outlets and outlet employment size)
                                                                                                      • Structure by turnover
                                                                                                        • Figure 29: Analysis of the Financial Structure of the Residential Nursing Care Activities Industry, 2016-2017, (£ 000 and % of Total Turnover)
                                                                                                        • Figure 30: Analysis of the financial structure of the residential care activities for the elderly and disabled industry, 2016-17, (£ 000 and % of total turnover)
                                                                                                        • Figure 31: Analysis of the financial structure of the hospital activities - medical nursing home activities industry, 2016-17, (£ 000 and % of total turnover)
                                                                                                    • Competitive Strategies

                                                                                                      • Anchor and Hanover plan to merge to become the largest provider of care for older people in England
                                                                                                        • Providers are choosing to construct high-quality homes and retirement villages that target the growing self-funder market
                                                                                                          • Digitising operational processes could lead to much needed cost savings and improve service provision
                                                                                                          • Company Profiles

                                                                                                            • Abbeyfield Society
                                                                                                              • Recent company activity
                                                                                                                • Financial information
                                                                                                                  • Figure 32: Financial analysis of Abbeyfield Society, 2013-17, (£ million)
                                                                                                                • Barchester Healthcare
                                                                                                                  • Recent company activity
                                                                                                                    • Financial information
                                                                                                                      • Figure 33: Financial analysis of Barchester Healthcare, 2012-16, (£000)
                                                                                                                    • Four Seasons Healthcare
                                                                                                                      • Recent company activity
                                                                                                                        • Financial information
                                                                                                                          • Figure 34: Financial analysis of Four Seasons Health Care, 2013-17, (£ million)
                                                                                                                        • HC-One
                                                                                                                          • Recent company activity
                                                                                                                            • Financial information
                                                                                                                              • Figure 35: Financial analysis of HC-One, 2013-17, (£ million)
                                                                                                                            • Housing & Care 21
                                                                                                                              • Recent company activity
                                                                                                                                • Financial information
                                                                                                                                  • Figure 36: Financial analysis of Housing & Care 21, 2013-17, (£ million)
                                                                                                                                • Sanctuary Care
                                                                                                                                  • Recent company activity
                                                                                                                                    • Financial information
                                                                                                                                      • Figure 37: Financial analysis of Sanctuary Care, 2013-17, (£ million)
                                                                                                                                  • The Consumer – What You Need to Know

                                                                                                                                    • 68% of people have not thought about how they would fund their long-term care
                                                                                                                                      • Nearly a third put performance rating as most important factor behind choice of home
                                                                                                                                        • Nearly three-quarters believe that CCTV camera installation would stop negative treatment of residents
                                                                                                                                        • Care Payment

                                                                                                                                          • 68% of people have not thought about how they would fund their long-term care
                                                                                                                                            • Figure 38: Residential care payment plans, April 2018, (% of respondents)
                                                                                                                                          • Half of women over-65 have considered the financial consequences of care compared to less than a third of men over 65
                                                                                                                                            • Figure 39: Residential care payment plans, by age and gender, April 2018, (% of respondents)
                                                                                                                                          • Personal savings expected to fund long-term care
                                                                                                                                            • Figure 40: Residential care payment method, April 2018, (% of respondents)
                                                                                                                                        • Choosing a Care Home

                                                                                                                                          • Nearly a third put performance rating as most important factor behind choice of home
                                                                                                                                            • Figure 41: Residential Care Home Choice Factors, by Rank of Importance, April 2018, (% of Respondents)
                                                                                                                                        • Sources of Information

                                                                                                                                          • Reviews and open days are most useful guides in selecting a home
                                                                                                                                            • Figure 42: Residential care home information sources, by rank of importance, April 2018, (% of respondents)
                                                                                                                                        • Care Home Opinion

                                                                                                                                          • Nearly three-quarters believe that CCTV camera installation would stop negative treatment of residents
                                                                                                                                            • Figure 43: Residential care home opinion, April 2018, (% of respondents)
                                                                                                                                          • Women have stronger opinion on CCTV in homes and higher guilt about moving a family member into a home
                                                                                                                                            • Figure 44: Residential care home opinion, by gender, April 2018, (% of respondents)
                                                                                                                                        • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                            • Abbreviations
                                                                                                                                              • Methodology
                                                                                                                                              • Further Sources and Contacts

                                                                                                                                                • Trade associations
                                                                                                                                                  • Trade magazines
                                                                                                                                                    • Trade events