The challenges and opportunities of an ageing population

The UK’s steadily aging population suggests that the long-term prospects for the sector are very strong.

The segment of the UK population aged 85 and over is projected to almost quadruple, to more than 4.6m (6.6 per cent) in 2056.

This bodes well for longer-term sector demand. However, as the population ages, the burden of supporting care for the elderly will fall on a proportionately smaller working population. This poses a significant challenge in terms of future funding especially in Wales where the bulk of funding currently comes from the government and local authorities.

Interest in investing in the sector is being driven by two main factors. The growing recognition of the potential returns that can be generated, coupled with the benefits of investing in a physical property asset make this a compelling option.

Over the next few years, the care home sector will come under greater pressure to invest in facilities as part of a growing drive to improve quality of care provision across the board as well as a need to increase the number of beds available.

We are also starting to see a greater emphasis on outcomes based care and inspections, focussed on improving the quality of the life for residents that goes beyond simply improving the quality of the asset.

In part, this is a reflection of the changing nature of residents’ requirements.

Today, operators widely report that residents are more frail when they are admitted, some 50 per cent of residents have a form of dementia, 70 per cent suffer from mental illness and 25 per cent have experienced a stroke – a very different picture to 20 years ago.

The bottom line is that care homes need to move with the times. As different generations begin to need long-term care, their expectations and demands on homes are changing, and adapting to evolving market conditions is key for profitability and growth.

Both existing care home operators, and those that are attracted to enter this market, can be encouraged by the long-term growth prospects. Profitability cannot be at the expense of quality of service, however, and providers must be aware that succeeding in this market will require a high degree of adaptability and investment.

Running a care home requires good and experienced management, with a high level of attention to detail and the ability to provide quality and comfortable accommodation with a strong care ethos.

Barclays Bank won the Health Investor Bank /Lender of the year in 2018 for the seventh time and offers a sector specialist proposition to the healthcare market led in South Wales by Sam Cole, Barclays Corporate and David Morgan, Barclays UK Banking and our customers are served by a Wales-wide network of skilled relationship and industry sector specialist managers.

We demonstrate expertise and a clear understanding of issues surrounding a customer’s business and the specific industry sector. For example, the structure of finance required by the healthcare sector differs greatly from that required by other industries.

Alongside our general support for the industry, as the world accelerates its technological and environmental advancements, Barclays can also support your business in keeping up with these changes. With a range of Green Finance Products to support investment in renewable energy technology which could reduce overhead costs and improve your environmental impact and funding to modernise your business, now is a great time to ensure you are keeping up with the pace of change.