Europe Long Term Care Market Outlook, 2031

Market Drivers

• Accelerated demographic aging and rising care dependency: Europe is the world's oldest region, with the share of people needing long-term care expected to increase from 11.6% in 2020 to 14.1% by 2070, pushing public expenditure from 1.7% to 2.6% of GDP. The number of people needing long-term care is projected to rise from 30.8 million today to 38.1 million by 2050. Germany's care-dependent population nearly doubled from 3.0 million in 2015 to 5.7 million in 2023, with the proportion of the population requiring care rising from 3.21% to 6.24%. France's APA beneficiaries are projected to increase from 1.4 to 1.6 million by 2030, with the dependent elderly population reaching 2.5–3 million by 2050. Spain recorded 1.78 million people with recognised dependency at the end of 2025, representing 3.6% of the population.
• Policy reforms and government investment in care infrastructure: The European Care Strategy, adopted in September 2022, established a Council Recommendation on access to affordable high-quality long-term care, calling on Member States to draw up national action plans to make care more available and accessible. Germany's Pflegereform is under active development, with the Bund-Länder-Arbeitsgruppe working on a "Zukunftspakt Pflege" to stabilise the long-term care insurance system. The UK government has made available up to £3.7 billion of additional funding for social care authorities in 2025/26 and committed over £4 billion of additional funding for adult social care in 2028/29 compared to 2025/26. The Netherlands is implementing trajectory care for community-dwelling vulnerable elderly with complex care needs.
• Shift toward home and community-based care: Across Europe, long-term care is increasingly delivered in home and community settings rather than institutional facilities. In Germany, 86.2% of care-dependent people lived in outpatient settings in 2023, with 9 out of 10 living in their own homes in 2025. The European Care Strategy explicitly recognises the right to access quality and affordable long-term care, especially community-based services and homecare. The Netherlands has expanded rehabilitation care at home since January 2025, making it easier for vulnerable elderly to receive care outside institutions. The UK government's Plan for Change emphasises helping older people live at home independently, with domiciliary care services increasing by 11% in 2024/25.

Market Challenges

• Critical workforce shortages and undeclared employment: Europe's long-term care sector employs around 6.3 million people, yet there is already a massive shortfall of carers. The sector will need more than 1.6 million extra long-term care workers by 2050 just to maintain today's level of support. Nearly all EU countries face critical labour shortages in long-term care, with the problem worse in lower-income EU countries. Approximately 2.1 million workers in long-term care across the EU are undeclared, defined as lawful work not declared to authorities. Most EU countries report persistent staff shortages and high turnover rates, with causes including low wages and challenging working conditions. Germany's care insurance system faces a billion-euro deficit that is projected to rise from €3.5 billion in 2026 to more than €12 billion in 2029 under unchanged regulations.
• Infrastructure deficits and capacity constraints: Despite high spending, many European countries face significant infrastructure deficits. Spain requires over 100,000 additional care beds to align with EU standards, with bed provision at 7% compared to Germany's 16% and France's 12%. Sweden needs between 100,000 and 140,000 new senior housing units by 2034, with 112 municipalities already reporting deficits in special housing for the elderly. The Netherlands has nearly 18,000 people on waiting lists for nursing home care despite some facilities reporting vacancies. In Italy, 26,187 people are on waiting lists for a single province alone, with a structural shortage that cannot keep pace with the aging population. The average stay in Italian RSA facilities is 33 months, with monthly fees ranging from €1,800 to €4,500, creating significant affordability pressures.
• Rising care costs and affordability pressures: The cost of long-term care continues to rise across Europe, creating significant affordability challenges. In Italy, public long-term care spending as a percentage of GDP declined from 1.43% in 2020 to 1.18% in 2024 despite increasing needs. In the UK, average care home fee income reached £1,298 per week in 2025, with occupancy stabilising at around 86%. In Spain, private economic contribution amounts to €3,138 per household, borne by 728,851 families, with amounts rising based on dependency grade. In France, the OGD for medico-social establishments has been revised downward, and APA expenditures are projected to double to €10–11.5 billion by 2040.

Market Trends

• Technology-enabled care and digital transformation: European countries are increasingly adopting technology to address workforce shortages and improve care quality. The Netherlands has implemented trajectory care for community-dwelling vulnerable elderly with complex care needs, where specialist geriatric physicians temporarily take over care from general practitioners. Geriatric rehabilitation care for vulnerable elderly and first-line stay costs increased by 12.1% in 2025, driven by expanded home rehabilitation options. The EU-funded Care4Skills project is developing a roadmap for a stronger long-term care workforce, with the Pact for Skills aiming to train at least 3.8 million long-term care workers. Digital platforms for care coordination and remote monitoring are being deployed across Nordic countries and the Netherlands.
• Growth of private sector investment in senior living: Private sector investment in senior living and long-term care is growing across Europe. In France, the top 15 EHPAD operators manage 108,000 beds, with the top five groups (Clariane, DomusVi, emeis, Colisée, and Domidep) concentrating 85,600 beds. Spain's care bed capacity must increase from approximately 384,000 to around 616,000 by 2033 to meet projected needs, creating significant investment opportunities. In the Netherlands, the private sector comprises approximately 15,000 to 16,000 care homes. The UK care home market has attracted significant investor interest, with average EBITDARM margins growing four percentage points to 30.1% in 2025.
• Expansion of home-based care models: The shift toward home-based care is accelerating across Europe, driven by beneficiary preference, government policies, and the relative cost-effectiveness of home care. In the UK, domiciliary care services increased by 11% in 2024/25, while residential care homes decreased by 1%. In Germany, 59.6% of care-dependent people received care allowance and organised care with family support, while only 11.2% used exclusively outpatient services. In the Netherlands, the number of 80+ citizens is rising from 900,000 in 2024 to 1.8 million in 2045, requiring smart choices about care delivery models. Home care providers in Nordic countries are expanding service offerings, with Sweden's municipalities facing increasing demand for home-based elderly care.

Policies

• The European Care Strategy, adopted by the European Commission in September 2022, established a comprehensive framework for improving long-term care across the EU. The strategy includes a Council Recommendation on access to affordable high-quality long-term care, calling on Member States to draw up national action plans to make care more available and accessible, and improving quality. The guidance covers adequacy, availability, and quality of long-term care, formal and informal carers, and long-term care policy governance.
• Germany's social long-term care insurance system, established under SGB XI, is the largest in Europe. The contribution rate was increased to 3.6% effective January 1, 2025, with childless employees paying a surcharge of 0.6 percentage points, bringing their total to 4.2%. The federal government is providing short-term stabilisation loans of €0.5 billion in 2025 and €3.2 billion in 2026. A comprehensive Pflegereform is being developed with the goal of taking effect by the end of 2026 or early 2027, aiming to reduce care-related co-payments and make the financing basis sustainable.
• France's Allocation Personnalisée d'Autonomie (APA) is a universal benefit granted by departmental councils to people aged 60 and over who have lost their autonomy. In 2025, maximum monthly amounts vary between €2,045.56 and €797.96 depending on the GIR level of dependency. The law "Bien vieillir" of 2024 reinforced controls and transparency of EHPAD establishments following the Orpea scandal, and since September 2025 the Qualiscope platform allows the public to consult quality ratings of each EHPAD free of charge.
• The United Kingdom's adult social care system is funded through a combination of local authority expenditure, NHS contributions via the Better Care Fund, and user contributions. The 2025 Spending Review allows for an increase of over £4 billion of funding for adult social care in 2028/29 compared to 2025/26. 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.
• Spain's Sistema para la Autonomía y Atención a la Dependencia (SAAD) is the cornerstone of long-term care financing. Public investment in dependency care reached a record €13.734 billion in 2025, with the central government contributing 27.4% and autonomous communities financing 72.6%. The reform of the Dependency and Disability Laws, approved by the Council of Ministers in July 2025, aims to eliminate incompatibilities, expand home care services, recognise telecare as a subjective right, and eliminate the two-year suspensive period for economic benefits.
• Italy's National Plan for Non-Self-Sufficiency 2025-2027 is the first national plan dedicated to the elderly population following the approval of the care reform (Law 33/2023). The plan defines the allocation of the Fund for Non-Self-Sufficiency (FNA) with a total allocation of €3 billion for the 2025-2027 period. The National Recovery and Resilience Plan has allocated €1.5 billion for transformation works in residential centres, impacting 90,000 places.