The main reason is staffing. A care home is not simply providing a room and meals. It is providing accommodation, supervision and personal care, often around the clock.

Staff costs account for approximately 60% of care home income, according to a 2025 industry report. Other significant expenses include the building, food, utilities, insurance and maintenance.

Let's use a fee of £1,300 per week, or £67,600 a year, as an example.

Illustrative breakdown of weekly costs

The following is an illustration of how a £1,300 fee might be distributed, rather than the audited accounts of a particular care home.

Staffing is the largest expense, but the precise proportions vary considerably between homes. Published cost analyses show substantial differences in staffing intensity, property costs and operating arrangements.

Why are staffing costs so high?

Consider a home with 50 residents.

If each resident costs £780 a week in staffing, that amounts to:

£39,000 per week for the entire home.
£2.03 million per year.

That money must cover care assistants, senior carers, managers, kitchen staff, cleaners and other employees.

The need for round-the-clock care

A care home must provide support throughout the day and night.

Even when residents are asleep, staff must be available to respond to emergencies, help residents use the toilet and provide reassurance.

A resident who needs assistance with washing, dressing, eating and mobility may require considerable staff time.

A nursing home can cost more because it also needs qualified nursing staff and must meet more complex medical and care needs.

The cost of the building

Care homes need suitable buildings with accessible bedrooms, bathrooms, communal areas, kitchens and facilities for residents with mobility difficulties.

The costs include:

Rent or mortgage payments.
Repairs and maintenance.
Fire safety and other compliance requirements.
Insurance.
Heating, electricity and water.

These costs continue whether every room is occupied or not.

Property and utility costs have also risen in recent years. A 2025 industry report highlighted substantial increases in food and property expenses since 2018.

How much profit does a care home make?

This is an important question.

Care homes are businesses, and private operators may earn profits. However, the weekly fee is not the same as profit.

A home charging £1,300 a week must cover its operating expenses, investment in the building and other financial obligations before any profit is realised.

Profitability varies considerably according to the home's size, staffing requirements, property arrangements and occupancy.

It is therefore not possible to assume that a £1,300 weekly fee contains a large profit margin.

Why do council-funded residents sometimes cost less?

There is a significant difference between what a self-funding resident pays and what a local authority pays for a resident.

For 2025-26, the average local authority fee in England was reported as:

These figures exclude the NHS-funded nursing care contribution for nursing homes.

The difference between council and private fees can be substantial.

However, it does not automatically mean that the council-funded resident receives less care. The rates reflect different purchasing arrangements and the terms negotiated between councils and providers.

The bigger question: could care be cheaper?

There are several possible ways to reduce the cost of care:

More support at home: Some people could remain at home with help from carers, although this is not always cheaper when intensive care is required.
Shared services: Larger homes may spread management, catering and other overheads across more residents.
Better prevention: Helping older people remain healthy and independent may delay the need for residential care.
Public investment: Government funding could reduce the amount individuals have to pay directly, although the underlying cost of providing care would remain.

The important distinction is between reducing the actual cost of providing care and changing who pays for it.

If the government pays more, the resident may pay less, but the cost still has to be funded through taxation or other public resources.

Main observation

At £1,300 a week, a care home costs approximately £67,600 per resident each year.

That is a very substantial sum for a pensioner.

Yet the largest share goes towards employing people to provide care and supervision.

The central question is whether we can provide older people with the care and companionship they need at a cost that is affordable to both individuals and society.