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Financial cost of dementia

1. Summary

Research conducted by the Alzheimer's Society, for its report Dementia UK: Second edition, shows that there will be 850,000 people living with dementia in the UK by 2015. This will cost the UK £26 billion a year.

Two-thirds (£17.4 billion) of the cost of dementia is paid by people with dementia and their families, either in unpaid care (£11.6 billion) or in paying for private social care. This is in contrast to other conditions, such as heart disease and cancer, where the NHS provides care that is free at the point of use. 

The research, commissioned through King's College London and the London School of Economics, provides the most detailed and robust picture to date of prevalence and economic impact of dementia in the UK.

2. The cost of dementia

The overall economic impact of dementia in the UK is £26.3 billion. This works out at an average annual cost of £32,250 per person. This consists of:

  • £4.3 billion of healthcare costs
  • £10.3 billion of social care of which:
  • £4.5 billion spent on publically-funded social care
  • £5.8 billion spent on privately-funded social care
  • £11.6 billion of unpaid care
  • £111 million on other dementia costs

The £11.6 billion cost of the 1.34 billion hours of unpaid carer provided each year has been calculated on the basis of the replacement and opportunity costs of this care. 

The total of £26.3 billion is 24% higher than the figure reported in the first edition of Dementia UK (Alzheimer's Society, 2007). Most of the difference is driven by the increase in numbers of people with dementia.

3. Projected future costs

The King's Fund projects that the financial cost of dementia in England would rise from £14.8 billion in 2007 to £34.8 billion in 2026, a rise of 135 per cent (King's Fund, 2008).

4. The Dementia Tax

Two-thirds (£17.4 billion) of the cost of dementia is paid by people with dementia and their families, either in unpaid care (£11.6 billion) or in paying for private social care. This is in contrast to other conditions, such as heart disease and cancer, where the NHS provides care that is free at the point of use.  This is because, although dementia is a physical disease of the brain, most of the essential care required supports daily activities, such as washing and dressing, which is classified as 'social' rather than 'health' care.

5. Potential savings

Research evidences shows that the cost of dementia could be significantly reduced. Improvements in diagnosis, treatment and care and support for people with dementia and their carers would help planning, avoidance of future admissions and improved clinical management (Department of Health, 2009). 

6.  References and further information

Alzheimer's Society (2014), Dementia UK: Second edition
Alzheimer's Society (2008), Dementia Tax
Alzheimer's Society (2007), Dementia UK
Department of Health (2009) Living well with dementia: A National Dementia Strategy
The King's Fund (2008) Paying the Price: The Cost of Mental Health in England

Last updated: September 2014 by Laurence Thraves

Dementia 2012

Alzheimer's Society Dementia 2012 report on how well people are living with dementia in 2012 in England, Wales and Northern Ireland.

Alzheimer's Society Counting the Cost report

Alzheimer's Society's Counting the Cost report:Caring for people with dementia on hospital wards.

Alzheimer's Society's Dementia Tax report

Alzheimer's Society's Dementia Tax report

       

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