Dementia care – how do I pay for it?
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Dementia Care
Unfortunately, dementia care isn’t usually free, so working out how you’ll cover the cost of care is an important step on your loved one’s care journey.
In this article, we’ll look at some of the ways people fund dementia care, and where that money goes.
Do I have to pay for dementia care?
Unlike NHS medical care, social care in the UK is not free. While some people do qualify for financial help from their local authority or the NHS, eligibility depends on the level of care your loved one needs.
In most cases, families cover some or all of the cost themselves. According to the Alzheimer’s Society, while the government contributes around £42 billion each year towards dementia care, people with dementia and their families still cover an average of £100,000 in out-of-pocket costs.
Sadly, your loved one may pay more for care than those with other health conditions. This is because dementia is progressive and often requires long-term support through social care services, which are not covered by the NHS.
That said, it’s always worth applying for financial support. Even if your loved one isn’t eligible right now, they may qualify in the future as their needs increase.
What is the cost of dementia care in the UK?
The cost of dementia care varies based on several factors:
- The level of support your loved one needs – Occasional help with daily tasks will cost less than 24/7 care or clinical nursing.
- The type of care – Residential care homes and live-in care have different costs.
- Financial means – If your loved one has limited assets, they may be eligible for funding.
- Location – Care costs tend to be higher in some regions, such as London and the South East.
Estimates suggest total dementia care costs can range from £100,000 to £500,000 over a person’s lifetime.
How much is dementia care in Scotland?
In Scotland, anyone over 65 who has been assessed as needing personal care is entitled to receive it for free, regardless of income. This includes help with tasks such as washing, dressing, and preparing meals. Currently, the flat rate for free personal care is just over £200 per week. Learn more in our guide to paying for care in Scotland.
Direct costs of dementia care
Care home costs
Most residential care homes offer dementia support. Your loved one will have their own room and receive help with personal care, medication, and meals. Many homes also offer communal areas, garden access, and structured daily activities.
Some care homes also have dedicated dementia units with enhanced support for those in the later stages of the condition. These may include specially trained staff, secure environments, and adapted layouts.
- Average cost: Around £1,306 per week (can vary depending on needs and location).
- Specialist dementia care homes: Offer enhanced environments and dementia-focused care programmes.
Home-based care costs
Visiting care
A professional carer visits your loved one at agreed times – from a few hours per week to multiple visits per day – helping with tasks like meal prep, bathing, and medication.
- Average cost: £30–£34 per hour, depending on your area and provider availability.
Learn more about visiting care.
Live-in care
A carer moves into your loved one’s home and provides continuous support, helping them remain safe and independent. This option is particularly helpful for those with mid-to-late-stage dementia.
- Estimated cost: £1,000–£2,000+ per week, depending on complexity of care.
Learn more about live-in care.
What are the indirect costs of dementia care?
There are also hidden costs to consider, such as:
- Unpaid care – family carers may have to reduce working hours or give up jobs.
- Travel costs – getting to appointments or day centres.
- Home adaptations – installing grab rails, stair lifts, or dementia-friendly design elements.
- Increased household spending – replacing household items with more accessible alternatives.
What happens if you can’t afford dementia care?
Local authority funding
Start with a free needs assessment from your local council. If this identifies that your loved one needs professional support, a financial assessment will follow.
If your loved one has less than £23,250 in assets (in England), they may be eligible for financial support.
You can:
- Accept direct payments and choose your own care provider.
- Let the council arrange and pay for care directly.
However, if you choose your own provider, you may need to top up any difference if the care costs more than the local authority’s allocated budget.
Having dementia doesn’t automatically qualify someone for funding, but if symptoms significantly affect safety and independence, your loved one is likely to be eligible for some support.
NHS Continuing Healthcare
NHS Continuing Healthcare (CHC) is a fully funded package of care for people with significant health needs. If your loved one qualifies, all care costs will be covered.
Eligibility is based on the intensity, complexity, or unpredictability of health needs – not on a specific diagnosis like dementia.
It’s essential to request an assessment if your loved one’s symptoms require frequent, skilled medical support.
NHS-funded nursing care
If your loved one doesn’t qualify for CHC, they may be eligible for NHS-Funded Nursing Care, which covers only the nursing component of their care – not personal or social care.
- Current weekly rate: £254.06 (England).
Important: Always apply for NHS Continuing Healthcare first. Accepting nursing care funding too early could affect eligibility for more comprehensive support later on.
The following are complex financial products. It’s important to consult a financial adviser before making a decision about how to pay for dementia live-in care.
Savings, pensions or loans
If your loved one isn’t eligible for funding and needs to pay for their own dementia care, they may be able to use personal savings or a pension. If additional funds are needed, taking out a loan from a bank or building society could help bridge the gap. This can be a useful short-term solution that allows them to remain in familiar surroundings while you explore more sustainable, long-term funding options.
Equity release
Releasing equity from a property is a common way to fund private care. Your loved one can continue living at home while accessing some of the property’s value — and because the funds are classed as a loan, they’re tax-free. There are two main ways to release equity: reversion plans and lifetime mortgages.
Reversion plans
With a reversion plan, your loved one sells a share — or all — of their home to a reversion company in exchange for a lump sum or regular payments. They retain the right to live in the property rent-free for life, and the company recovers its money when the property is eventually sold. The company may also share in any increase in the home’s value.
Typically, reversion companies offer between 30% and 60% of the property’s market value, depending on factors such as the homeowner’s age and health.
Lifetime mortgages
A lifetime mortgage allows your loved one to borrow against the value of their home, with the loan being repaid — plus interest — when the property is sold after they pass away or move permanently into residential care. Any remaining value in the property after repayment will go to their beneficiaries.
To prevent the risk of debt being passed on, many lifetime mortgages now include a no-negative equity guarantee — meaning that if the property sells for less than the amount owed, no additional money will need to be repaid by the estate or family.
A key benefit of a lifetime mortgage is that the money released is tax-free, and some equity may still be left for the family when the property is sold.
It’s important to seek independent financial advice when considering equity release, to fully understand the long-term implications and suitability for your loved one’s situation.
Care annuities
A care annuity — also known as an immediate care plan, immediate needs annuity, or care fee payment plan — is an insurance product that provides a guaranteed income to cover ongoing care costs for the rest of a person’s life. It’s funded with a one-off lump sum, and the income is typically paid directly to the care provider.
These annuities can be index-linked to rise with inflation, and some providers offer capital protection, meaning that if your loved one passes away sooner than expected, a portion of the initial lump sum may be refunded to the estate.
Care annuities may also help reduce inheritance tax liability, as the lump sum used to purchase the annuity is no longer part of the estate.
However, this option may not suit everyone — particularly if care is only needed for a short time. Because the cost is based on an estimate of life expectancy, there is a risk that the annuity may not offer full value if care needs end earlier than expected.
Speak to SOLLA
SOLLA (The Society of Later Life Advisers) help older people and their families in finding trusted accredited financial advisers who are experienced in working with and understanding financial needs in later life.
To find out more or to find an accredited adviser near you visit their website.
Learn more about dementia care
Take a look at more Elder guides on living with and caring for dementia.
