Financial and legal issues (Dementia: what next? series)

Mounting Dementia Costs Demand Early Planning

The UK has reached a critical milestone: more than one million people are now living with dementia, a figure crossed in 2025 amid an ageing population. This surge drives the total economic cost to £42 billion in 2024, projected to double to £90 billion by 2040, with social care and unpaid family contributions forming the bulk—over 63%—of the burden falls directly on individuals and families rather than the state.

Care expenses escalate sharply as dementia advances, from around £29,000 annually for mild cases to over £80,000 for severe ones. Means-tested rules remain unchanged for 2025–2026, with capital limits fixed at £14,250 (lower) and £23,250 (upper), meaning those with assets above the upper threshold pay full care fees, often depleting savings or forcing property sales. Deferred Payment Agreements offer some relief by deferring council charges until death, but they accrue interest and still require repayment from estates.

Legal mechanisms like Lasting Power of Attorney (LPA) are essential to avoid these pitfalls. An LPA allows trusted individuals to manage finances, property, health, and welfare decisions if capacity is lost. Yet applications became more expensive in late 2025, rising from £82 to £92 per LPA, incentivising earlier action. The Powers of Attorney Act 2023 modernised processes with online applications to cut backlogs, but broader Mental Capacity Act reforms—intended to replace flawed Liberty Protection Safeguards—remain stalled, leaving gaps that contribute to unlawful detentions, preventable harms, and escalating human and financial costs.

Without an LPA, families must apply to the Court of Protection for deputyship, a slow, expensive process that can freeze bank accounts, block property transactions, and expose vulnerable people to financial abuse. Court reviews show dementia frequently underlies capacity cases, and inaction amplifies family tensions over decisions, inheritance implications, and care funding.

These pressures coincide with persistent under-diagnosis and delayed planning, leaving many to confront crises unprepared as prevalence climbs toward 1.4 million by 2040.