United Kingdom Long Term Care Market Overview, 2031

Key Insights

• The United Kingdom long-term care market is one of the largest and most established in Europe, underpinned by a mixed economy of public and private funding. The total value of adult social care across all funding sources is estimated at £34.5 billion, with gross current expenditure by local authorities reaching £29.4 billion in 2024/25. The care homes for older people market alone reached an annualised value of £27.3 billion in 2025/26.
• The UK long-term care market is characterised by a strong independent sector, with the majority of care homes operated by for-profit providers. The private pay segment is now valued at £14.1 billion, accounting for 55% of total independent market value. This reflects a significant shift toward self-funding, with 62% of people enquiring about care homes expecting to pay for it themselves.
• As of December 2025, there were 685,000 people receiving long-term local authority arranged or provided adult social care in England. An additional 683,000 people were receiving long-term local authority-funded care as of September 2025. The care home sector had 360,343 residents in the week ending 14 November 2025, with an occupancy rate of 86.3%.
• The UK adult social care workforce faces persistent challenges despite recent improvements. The vacancy rate fell to 6.2% in 2025/26, the lowest since 2015/16, equating to around 96,000 vacancies on any given day. However, the reduction in vacancies has been driven primarily by the recruitment of overseas staff, with the number of British staff in fact falling by 30,000 in 2024/25. Skills for Care forecasts that 200,000 more care workers will be needed by 2030.
• The UK government has initiated significant reform of the adult social care system. In 2025, the government announced a funding boost of up to £3.7 billion for social care authorities, an uplift to the Disabled Facilities Grant of £172 million, and the largest ever uplift to Carer's Allowance of £2,000. The 2025 Spending Review allows for an increase of over £4 billion of funding available for adult social care in 2028/29 compared to 2025/26.

Market Outlook

• According to the research report, "United Kingdom Long Term Care Market Overview, 2031 Outlook," published by Bonafide Research, the UK Long Term Care Market is anticipated to add more than USD 18.2 Billion by 2026-31. This growth is supported by sustained demographic pressures, rising care costs, and the ongoing transformation of the adult social care system through the development of a national care service.
• The UK's demographic trajectory is a primary driver of long-term care demand. The population is ageing rapidly, and the UK will need 470,000 new care posts by 2040 to meet the needs of the ageing population. The number of older people requiring care is expected to rise significantly in the coming decades, creating sustained demand across all service types.
• The care homes for older people market has demonstrated significant growth, with the annualised value reaching £27.3 billion in 2025/26. This growth has been driven by sustained fee increases linked to rising operating costs, including National Living Wage uplifts and wider inflationary pressures. The market value has risen by 25% over the last three years (2022/23 to 2025/26).
• The private pay segment continues to grow in importance, now valued at £14.1 billion and accounting for 55% of total independent market value. This trend is expected to continue as local authority budgets remain under pressure and more individuals are required to self-fund their care. Private funding remains dominant, but state-funded demand is also rising.
• The UK government's commitment to adult social care reform represents a significant opportunity for market growth. The 2025 Spending Review allows for an increase of over £4 billion of funding available for adult social care in 2028/29 compared to 2025/26. The development of a national care service, expected to be informed by the independent commission chaired by Baroness Casey, will shape the future of the market.

Market Dynamics

Driver: Accelerating Demographic Ageing and Rising Care Demand The United Kingdom is experiencing a profound demographic shift that is fundamentally reshaping the long-term care landscape. The population is ageing rapidly, with the number of people aged 65 and over projected to increase substantially in the coming decades. The UK will need 470,000 new care posts by 2040 to meet the needs of the ageing population. As of December 2025, there were 685,000 people receiving long-term local authority arranged or provided adult social care in England. An additional 683,000 people were receiving long-term local authority-funded care as of September 2025. The care home sector had 360,343 residents in the week ending 14 November 2025, with an occupancy rate of 86.3%. The growth in demand is driven by increasing life expectancy, the ageing of the baby boom generation, and the rising prevalence of chronic conditions and dementia. As the population continues to age, the demand for long-term care services is expected to intensify, creating sustained pressure on the UK's long-term care delivery system and financing mechanisms. Local authorities received 2.02 million requests for support from new clients in the last year, reflecting the scale of demand growth.

Challenge: Workforce Shortages and Reliance on Overseas Staff The UK long-term care market faces a persistent workforce crisis that threatens service availability and quality. Despite recent improvements, the vacancy rate in adult social care remains three times higher than the wider economy. The vacancy rate fell to 6.2% in 2025/26, the lowest since 2015/16, equating to around 96,000 vacancies on any given day. However, this reduction has been driven primarily by the recruitment of overseas staff, with the number of British staff in fact falling by 30,000 in 2024/25. Given the forecast that 200,000 more care workers will be needed by 2030, there is little realistic hope that this demand will be met without significant intervention. The adult social care workforce skills survey found that 46% of respondents found it difficult to recruit individuals with the necessary skills to meet the needs of service users in the last 12 months. Additionally, 27% said skills gaps in the workforce had impacted their business performance and growth. Without significant investment in workforce recruitment, training, compensation, and career development, the UK's long-term care system will face increasing difficulty in meeting growing demand for care, potentially leading to access constraints and service disruptions.

Trend: Shift Toward Home-Based Care and Private Funding A fundamental shift in long-term care delivery is occurring in the United Kingdom, with services increasingly being delivered in home-based settings and an increasing proportion of care being funded privately. Domiciliary care services increased by 11% in 2024/25, while residential care homes decreased by 1%, reflecting the clear preference for care at home. The government's Plan for Change emphasises helping to keep older people out of hospital and living at home independently. In parallel, the private pay segment has grown significantly, now valued at £14.1 billion and accounting for 55% of total independent market value. New data reveals that 62% of people enquiring about care homes expect to pay for it themselves. Nearly three-quarters (73%) of care seekers in South East and South West England self-fund their care, compared with 46% in Scotland, 50% in North East England and 55% in Wales. This trend is driven by local authority budget constraints and the rising threshold for state-funded care.

Policies

• The UK government has initiated a comprehensive reform of the adult social care system. In 2025, the government announced a funding boost of up to £3.7 billion for social care authorities, an uplift to the Disabled Facilities Grant of £172 million, and the largest ever uplift to Carer's Allowance of £2,000. The government has also legislated for the first ever Fair Pay Agreement for care workers.
• The 2025 Spending Review allows for an increase of over £4 billion of funding available for adult social care in 2028/29 compared to 2025/26, including additional grant funding, growth in other sources of income, and an increase to the NHS contribution to adult social care via the Better Care Fund.
• The government has established an independent commission into adult social care, chaired by Baroness Louise Casey, to recommend reforms and inform the development of a national care service. The commission will work with people drawing on care and support, families, staff, politicians and the public, private and third sector to make clear recommendations for how to rebuild the adult social care system.
• The government has announced an £86 million boost to the Disabled Facilities Grant for the 2025/26 financial year, taking the annual total to £711 million, to allow 7,800 more disabled and elderly people to make vital improvements to their home.
• The government has published the Better Care Fund policy framework for 2025 to 2026, setting out the objectives, funding and conditions for the fund. The NHS contribution to adult social care via the Better Care Fund has been increased.
• The government has announced an uplift to NHS-funded nursing care, with the standard weekly rate per person increasing from £235.88 to £254.06 from 1 April 2025.
• The government has developed a shared digital platform to allow up-to-date medical information to be shared between the NHS and care staff, including when someone last took their medication, to ensure people receive the best possible care.

Segment Analysis

United Kingdom Long-Term Care Market By Service Type • Home Healthcare: Home healthcare represents a growing segment of the UK long-term care market, driven by the clear preference for care at home and government policies promoting independent living. Domiciliary care services increased by 11% in 2024/25, while residential care homes decreased by 1%. The home healthcare segment includes home care agencies providing personal care, nursing care, and support services in the individual's own home. The segment is supported by the government's Plan for Change, which emphasises helping to keep older people out of hospital and living at home independently. The growth of domiciliary care reflects both workforce constraints and a clear preference for care at home.
• Nursing Care / Skilled Nursing Facilities: The nursing facility sector in the UK comprises residential care and nursing homes for older people. The care homes for older people market reached an annualised value of £27.3 billion in 2025/26. The sector includes both residential care homes (providing personal care) and nursing homes (providing 24-hour nursing care). The market has demonstrated significant growth, with market value rising by 25% over the last three years (2022/23 to 2025/26). As of the week ending 14 November 2025, there were 360,343 residents in care homes, with an occupancy rate of 86.3%. The sector faces significant capacity constraints, with rising demand and workforce shortages limiting supply growth.
• Assisted Living Facilities: Assisted living facilities represent a growing segment of the UK long-term care market. The sector includes retirement communities, extra care housing, and supported living services that provide a combination of housing and care. The assisted living segment is supported by government policies promoting independent living and home adaptations, including the Disabled Facilities Grant, which received an £86 million boost. Extra care housing is increasingly seen as a cost-effective alternative to residential care for individuals with moderate care needs.
• Hospice and Palliative Care: Hospice and palliative care services in the United Kingdom are delivered across multiple settings, including homes, hospice facilities, and hospitals. The UK has a well-developed hospice sector, with both NHS and charitable providers delivering end-of-life care. The growing prevalence of chronic conditions and increasing life expectancy are driving demand for palliative care services. The NHS-funded nursing care rate increase to £254.06 per week supports the provision of nursing care in end-of-life settings.
• Other Services: This segment includes day care facilities, short-term respite care, and specialist care services for younger adults with disabilities. Over 750,000 younger adults are in receipt of long-term care in the UK, and this number is only set to expand, driven by demography. Specialist care services include learning disability services, supported housing, neuro-rehabilitation, and mental health services. Day care services provide respite and social engagement for older adults and people with disabilities, supporting the preference for home-based care.

United Kingdom Long-Term Care Market By Payer Type • Public: Public sources, primarily local authorities and the NHS, account for a substantial portion of long-term care funding in the UK. The specialist care market is overwhelmingly delivered by independent sector providers, with 95% of funding sourced from public bodies (primarily local authorities and the NHS). Gross current expenditure by local authorities reached £29.4 billion in 2024/25. The 2025 Spending Review allows for an increase of over £4 billion of funding available for adult social care in 2028/29 compared to 2025/26. However, local authority budgets remain under pressure, with rates of access to publicly-funded long-term social care varying significantly across regions.
• Private: Private sources account for a growing proportion of long-term care funding in the United Kingdom. The private pay segment is now valued at £14.1 billion, accounting for 55% of total independent market value. New data reveals that 62% of people enquiring about care homes expect to pay for it themselves. Nearly three-quarters (73%) of care seekers in South East and South West England self-fund their care. The private pay segment is driven by the rising threshold for state-funded care, with individuals in England with assets above £23,250 required to self-fund. Private sector providers are predominantly for-profit, and the market has seen significant consolidation.
• Out-of-Pocket: Out-of-pocket payments represent a substantial component of long-term care spending in the United Kingdom. Individuals who are required to self-fund their care bear the full cost of their care. Weekly care home costs for self-funders average £1,298 for residential care. For individuals requiring nursing care, the standard weekly rate for NHS-funded nursing care is £254.06 in England for 2025/26. Out-of-pocket costs vary significantly by region, with costs typically higher in the South East and lower in Scotland and the North East.

United Kingdom Long-Term Care Market By Gender • Female residents account for a larger share of long-term care spending in the United Kingdom, driven by higher life expectancy and higher rates of disability in advanced age. Women are more likely to reach advanced ages where care dependency is highest. Women also dominate the long-term care workforce, with the majority of care workers being female. Women are more likely to live alone in old age, increasing their reliance on formal paid care services rather than informal family caregiving. Female representation is particularly pronounced in the 85+ age group, which has the highest per capita care utilization.
• Male residents account for a smaller but growing share of long-term care spending in the United Kingdom. The need for long-term care affects persons of all ages and is generally measured by limitations in an individual's ability to perform daily personal care activities. Men are more likely to need long-term care at younger ages due to disabilities and chronic conditions. As male life expectancy increases, the representation of men in the older adult cohort is slowly growing, which may gradually increase the male share of long-term care spending.

United Kingdom Long-Term Care Market Economics

• The cost of long-term care services varies significantly by service type, geographic location, and payer source. The care homes for older people market reached an annualised value of £27.3 billion in 2025/26. Weekly care home costs for self-funders average £1,298 for residential care. The private pay segment is now valued at £14.1 billion, accounting for 55% of total independent market value.
• Staffing costs represent the largest operating expense for all long-term care providers. The workforce vacancy rate fell to 6.2% in 2025/26, the lowest since 2015/16. However, the number of British staff in fact fell by 30,000 in 2024/25, with reductions driven primarily by the recruitment of overseas staff. The National Living Wage uplifts and wider inflationary pressures have been key drivers of fee increases.
• Public funding of long-term care is under significant pressure. Gross current expenditure by local authorities reached £29.4 billion in 2024/25. The 2025 Spending Review allows for an increase of over £4 billion of funding available for adult social care in 2028/29 compared to 2025/26. However, local authority budgets remain under pressure, and the threshold for state-funded care means that many individuals are required to self-fund.
• Out-of-pocket costs represent a substantial burden on households. Individuals in England with assets above £23,250 are required to self-fund their care. Weekly care home costs for self-funders average £1,298 for residential care. For individuals requiring nursing care, the standard weekly rate for NHS-funded nursing care is £254.06 in England for 2025/26.
• The economic value of home- and community-based services relative to institutional care is a key policy consideration. Domiciliary care services increased by 11% in 2024/25, while residential care homes decreased by 1%. The government's Plan for Change emphasises helping to keep older people out of hospital and living at home independently.


Considered in this report
• Historic Year: 2020
• Base year: 2025
• Estimated year: 2026
• Forecast year: 2031

Aspects covered in this report
• Long-term care Market with its value and forecast along with its segments
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

By Service Type
• Home Healthcare
• Nursing Care / Skilled Nursing Facilities: 
• Assisted Living Facilities
• Hospice & Palliative Care:
• Other Services

By Payer Type
• Public
• Private
• Out-of-Pocket

By Gender
• Male
• Female