OBJECTIVES: The UK has an ageing and growing population and the prevalence of renal replacement therapy (RRT) has grown by 5.0% annually since 2000.  RRT accounts for over 2% of the current NHS expenditure.  Transplantation increases survival, improves quality of life and maintenance costs are less than dialysis. Despite increasing rates of transplantation, an estimated 7,000 patients remain on the waiting list. The objective of this study was to quantify the relationship between graft survival time, total estimated cost and the number of projected patients on the transplant waiting list.  METHODS: We utilized a population based simulation model with published disease progression, incidence and prevalence parameters specific to the UK. We evaluated the number of years of functioning graft required for transplantation to remain cost saving compared to dialysis; the number of future transplants or improvement in graft survival required to avoid the transplant waiting list increasing. The study utilises UK costs and future costs and benefits were discounted at 3.5% RESULTS: Over a 10-year projected time horizon the total per-patient cost saving associated with remaining on dialysis compared to transplant was £276,330; however, a cost saving was conditional upon achieving at least 3-years of functioning graft.  In order to maintain the transplant waiting list at approximately 7,000, the number of annual transplants conducted would need to increase from 2,645 in 2010 to 3,640 by 2022 (a 37.6 % increase).  At current activity levels the transplant waiting list is projected to increase by approximately 1,983; improvement in graft survival could potentially reduce this by 941. CONCLUSIONS: For kidney transplantation to be cost saving recipients must maintain at least 3 years of functioning graft. As early graft failure also impacts on future transplant waiting time, management strategies that maximize graft survival will reduce costs and improve service delivery targets.