Last Updated: March 27, 2026
Beth Britton reports on current UK dementia care funding and assessment processes, and speaks to two experts about the costs of different types of care and the benefits of financial forward planning for families
Living with dementia often means that a person will eventually need some professional support with their care. A person’s care needs, unless they are in hospital, may be met by family members and friends (unpaid carers) in the early to mid-stages of their dementia. However, as dementia progresses, home care (also known as domiciliary care or hourly care), live-in care or a care home may be needed.
The majority of dementia care needs are classed as adult social care, which is means tested through an assessment process looking at a person’s income and assets and whether they are above or below the thresholds – which vary across the four nations of the UK – for local authority support.
In addition, some people with dementia may qualify for NHS Continuing Healthcare (CHC) or NHS-funded nursing care, and this is covered later in this article.
Facts and figures on dementia care costs
In their report ‘The economic impact of dementia’ the Alzheimer’s Society said:
“The cost of dementia in the UK is forecast to be £42 billion in 2024, rising to £90 billion by 2040. The average per person costs associated with mild, moderate and severe dementia are estimated to be £28,700, £42,900, and £80,500 respectively, with increase in cost by severity driven by increasing need of complex care.”
However, it’s important to stress that each person’s personal care and financial circumstances will be different, and the cost of care will depend on factors such as the person’s overall health (for example, does the person live with multiple conditions alongside their dementia?), how much support from unpaid carers (family and friends) is available, how the person manages to live with their dementia (some people find their dementia progresses quite slowly, for other people it will be quicker, and of course symptoms vary hugely) and, ultimately, how long the person lives for after their dementia diagnosis.
How do I find out what I need to pay for care?
The first step in finding out how the personal circumstances of the person needing care will affect what they must pay is to have a care needs assessment, to ascertain what professional care is needed, and then a financial assessment to decide how that care will be funded. These assessments are done by the person’s local authority adult social care department.
A care needs assessment will look at the person’s health, what they are able and unable to do, how much support the person has within their family/friendship group, their living arrangements and care preferences. Find out more from Age UK here.
A financial assessment will look at the person’s income, benefits, savings and assets etc, including whether the home the person lives in needs to be included in the assessment or not. Find out more from Age UK here.
How does where I live affect what I will need to pay?
Where the person is living in the UK will affect how much they must pay as the capital limits vary across England, Scotland, Wales and Northern Ireland.
If the person has savings/assets/income above the upper threshold, they’ll need to pay for all of their care, meaning they are a ‘self funder’. If the person’s savings/assets/income fall below the lower threshold they’ll receive the most local authority funding that’s available, and if the person falls between the two thresholds, they’ll receive some funding based on where they fall within those thresholds.
Threshold limits for a person’s capital for 2025/2026 are:
In England:
Upper capital limit – £23,250
Lower capital limit – £14,250
You can find out more about funding care in England here
In Scotland:
Upper capital limit – £35,000
Lower capital limit – £21,500
You can find out more about funding care in Scotland here.
In Wales:
Upper capital limit – £50,000
Lower capital limit – N/A
You can find out more about funding care in Wales here.
In Northern Ireland:
Upper capital limit – £23,250
Lower capital limit – £14,250
You can find out more about funding care in Northern Ireland here.
Can I get any help from the NHS?
NHS Continuing Healthcare (CHC) is a means of fully funding dementia care through the NHS for a person who is considered to have a ‘primary health need’. This is different from the majority of people’s needs, which are classed as ‘social care needs’ and are therefore met through adult social care services (via your local authority) as described above.
There is an assessment process for CHC. More in-depth information on how to obtain CHC for a person with dementia can be found in this article I wrote for Care Choices that includes expert advice from Paul Edwards, Chief Nursing Officer at Dementia UK: Obtaining CHC for a person with dementia.
If a person doesn’t qualify for CHC but is living in a nursing home, they may be eligible for NHS-funded nursing care. This is where the NHS pays a nursing home directly for the nursing component of a person’s care. Find out more about this from the NHS
What are the average costs for different types of dementia care and how do you find the right service for yourself or your loved one?
Dementia care services vary hugely, from those provided in the person’s own home – IE: companionship through to hourly care (home care / domiciliary care) and full-time live-in care – and those provided in a care home – IE: residential care through to nursing care and end-of-life care.
Respite care is also available to help family carers to have a break. This can be provided in a person’s own home (through live-in care) or in a care home. Find out more about respite care here.
I asked Mitch Miller, Senior Care Product Manager at retirement specialists Just Group to explain how the costs for this multitude of different types of care can vary:
Mitch, many people believe that a care home is the only type of care a person in the latter stages of dementia will be able to have. How does the cost of dementia care in a care home compare to the cost of live-in care in the person’s own home?
“At Just, our 2024 Care Report found that the average annual cost of a care home for a self-funder is around £58,240, and this can rise if nursing care or dementia support is needed. Live-in care at home generally starts from around £1,200 per week for standard support, but for dementia-specific live-in care, you’re more likely to be looking at £1,400 to £1,600 per week, depending on complexity and location. That’s roughly £72,800 to £83,200 a year. While that can be higher than a care home, live-in care offers one-to-one support and allows someone to stay in familiar surroundings, which can be hugely reassuring and beneficial for people living with dementia, especially in the later stages.”
Sources of Data:
https://www.justgroupplc.co.uk/~/media/Files/J/Just-Retirement-Corp/news-doc/2024/just-group-care-report-2024-groundhog-day.pdf
https://www.alzheimers.org.uk/sites/default/files/2024-05/the-annual-costs-of-dementia.pdf
In your work as a retirement specialist, do you find that people have a general idea of what care costs, or are many individuals and families in the dark about this?
“While our Care Report doesn’t quote specific figures for hourly care, we know from broader research that many people underestimate care costs quite significantly. In fact, 60% of over-45s underestimated the average care home cost by £10,000 or more a year. That tells me there’s a lack of awareness about what different care options actually cost. Hourly care, things like companionship visits or help around the house, can be a more affordable and flexible way to support someone in the earlier stages, and it can help delay the need for more intensive care.”
It’s often tempting to have shorter home care visits to have a lower care bill, but why is a minimum of an hour’s care visit usually recommended?
“In my experience, shorter visits often don’t allow enough time for quality care. Dementia care in particular isn’t just about tasks, it’s about connection, reassurance, and routine. A full hour gives the carer time to do what’s needed in a calm, unhurried way, while also keeping an eye on any signs of change in the person’s wellbeing. It makes for better care and better outcomes.”
Finally Mitch, what would be your top tips for families navigating the minefield of dementia care costs and choosing care providers?
“My top tip is: don’t try to figure it all out alone, good advice early on can save stress and money later. Dementia care can be complex, and costs vary hugely depending on what type of support is needed and where you live. One of the best starting points is to get a care needs assessment from your local authority, it’s free and can help clarify what kind of care might be appropriate.
At Just, we also partner with My Care Consultant, a care navigation service that provides independent guidance to families. They offer a free initial phone consultation and can help with everything from sourcing suitable care providers to understanding funding entitlements and legal considerations. Their support can save families a lot of time, worry, and confusion, especially if they’re navigating the care system for the first time.
Lastly, I’d encourage families to ask detailed questions when comparing providers: What dementia training do carers have? Will you have continuity of care? How are changes in need managed over time? The right provider should be just as focused on quality of life and emotional wellbeing as they are on practical tasks.”
How can families plan for future care needs today?
Families are often advised to obtain financial planning advice before they need to arrange care. This avoids making decisions in a crisis and enables care costs to be understood and budgeted for in advance of needing care.
I asked Darren Knibb, Owner at Darren Knibb Wealth Management Ltd to explain what families can do today to plan for tomorrow:
Darren, we hear a lot about deprivation of assets, where people try to give away assets to avoid them being considered in a financial assessment for care, and how this can be penalised. How can people protect their assets and plan for care costs without incurring penalties?
“As we know care comes in lots of different forms and the cost of care varies hugely. Often, I hear people ask how they can get ‘the state to pay?’ but self-funding puts you in full control of your own care. Choosing your preferred care or nursing home in a convenient location offering the very best care has obvious advantages and if you have the funds to provide a high level of care when you are vulnerable, why wouldn’t you want to?!
If a local authority believes you have gifted assets away with the intention of avoiding care costs this can be classed as ‘deliberate deprivation of assets’ and consequences can include financial penalties, loss of funding and legal challenges.”
What is the seven-year rule (relating to giving away assets) and how does this impact care funding eligibility and inheritance tax?
“The 7-year rule relates to gifts made during your lifetime and whether those gifts are potentially subject to Inheritance Tax (IHT) on a death. Important to say, there is no Inheritance Tax when assets pass from spouse to spouse, but any gifts made over the annual allowance can effectively be brought back into an IHT calculation if the donor passes away within 7 years from the date of the gift.”
Financial planning for the future can include things like trusts and tenants-in-common agreements – How could families facing potential future care costs make use of these options?
“Building wealth over your working life to ensure a financially secure future will always be key to any planning. Having the means to support yourself in later life will provide options on your future care arrangements. Seeking legal advice around the home ownership can potentially avoid property being sold to fund care and using a financial planner to consider funding the care from investments or via an immediate needs annuity, trust planning and using cashflow modelling will really help bring to life options around funding care and protecting assets.”
Finally Darren, what practical, actionable financial tips would you give to families where loved ones are currently well but may develop dementia in the future, or indeed to families who have been given a diagnosis?
“The first thing I would say is having a Lasting Power of Attorney is critical. The attorney is the person appointed to make decisions on behalf of the Donor should they lose mental capacity. The LPA comes in two forms, Property & Financial Affairs which enables the attorney to make decisions relating to the house, bank accounts, paying bills etc and Health & Welfare enabling decisions to be made about care, where you live, medication etc.
Taking qualified advice in relation to finances is likely to be extremely important. Speaking with a solicitor around property ownership and seeking advice from a financial planner relating to utilising assets to work for you to support care costs in the short, medium and long term is incredibly important.”
Further information
Dementia UK – Financial and Legal Support
Care Choices – Paying for care
NHS – Money, work, benefits and social care
Please note: The Casey Commission into Adult Social Care (due to run until 2028) will be examining funding as part of its terms of reference
