Dementia not only poses significant health challenges but also risks considerable financial disruption for individuals and their families, experts warn ahead of World Alzheimer’s Day. Sarah Coles, head of personal finance at AJ Bell, emphasized the importance of early financial planning while individuals are still mentally capable.
Approximately 982,000 people in the United Kingdom are currently living with dementia, with over one-third undiagnosed. In 2025, dementia and Alzheimer’s disease were the leading underlying causes of death in England and Wales, accounting for 12.7% of all registered fatalities.
Coles highlighted that financial difficulties can begin even before a formal diagnosis. Common issues include missed or duplicate bill payments, inappropriate investment decisions, excessive pension withdrawals, and impulse spending. Memory problems may lead to lost bank cards, forgotten PINs, and vulnerability to scams. There is also a risk of financial abuse by caregivers, friends, or family members.
To mitigate these risks, Coles recommended several practical steps. Setting up direct debits for regular bills can help prevent missed payments, while relatives should monitor for unusual financial activity such as unopened mail, unexpected purchases, or large withdrawals. Establishing a joint bank account or arranging a third-party mandate can allow trusted individuals to oversee finances while the person retains mental capacity.
Coles also advised informing financial institutions about vulnerability so they can implement safeguards, including spending limits or issuing chip-and-signature cards for those who forget their PINs. Registering with services that reduce unwanted calls and mail, and sharing access to email accounts, can further protect against fraud.
A critical safeguard is establishing a Lasting Power of Attorney (LPA), which legally authorizes trusted individuals to manage financial and health decisions once a person loses capacity. Two types are available—one for property and financial matters, and another for health and welfare—and both must be registered in advance.
The cost of dementia care is another major concern. The Alzheimer’s Society estimates that severe dementia care averages around £80,500 per person. In England, individuals with assets over £23,250 are generally expected to cover their full care home costs until their assets fall below £14,250, although income contributions may still be required. This financing gap reinforces the need for early financial planning.
Coles outlined seven key recommendations to protect personal wealth and prepare for care needs:
1. Discuss your wishes with family to ensure clarity on care and financial arrangements.
2. Establish LPAs for both financial and health matters to provide a clear framework for decision-making.
3. Brief attorneys thoroughly about managing bills, locating assets, and handling finances.
4. Create a will to avoid complications later.
5. Simplify finances by consolidating accounts where possible, without sacrificing benefits or incurring penalties.
6. Seek professional financial advice to ensure continuity and support for attorneys unfamiliar with financial matters.
7. Plan how to cover care costs, including building emergency savings, considering pension allocations, and evaluating options such as equity release or selling property.
Coles stressed that while the onset of dementia cannot be predicted, proactive financial planning offers the best chance to protect both individuals and their families from future hardship.