OBJECTIVES: The prevalence and economic burden of dementia is increasing, and in 2007 the UK government declared dementia a national priority. This research aims to evaluate trends in care home costs for dementia patients following this announcement, and to discuss the implications for the future economic burden of dementia. METHODS: PubMed was searched for terms related to ‘cost’, ‘care homes’ and ‘dementia’. Horizon scanning was additionally performed for costs of care home data in the context of the wider economic burden of dementia. Only UK studies published after 2007 were considered, and information from a range of sources was assimilated to understand future implications for the economic burden of dementia. RESULTS: Four relevant PubMed articles and an additional twelve publications from horizon scanning were identified. It was reported that two-thirds of care home patients have dementia and that accommodation costs represent the major contributor to the cost of dementia (41%). The average annual cost of a care room had risen from £25,953 in 2011 to £27,404 in 2012 and this was accompanied by a 3.9% deficit in local authority payment increases for care home residents from 2010 to 2012. It is estimated that by 2043, more than double the current number of care home places will be required to match the increase in dementia prevalence, and the economic dependency ratio is expected to increase from 24% to 30% over the next 15 years. CONCLUSIONS: A considerable proportion of dementia patients are treated in care homes and, considering the disparity between the rising costs of care homes and funding increases, the burden borne by patients and their families is increasing. There is therefore an imminent need to develop cost-effective service provision for dementia patients; the new remit of NICE in social care may represent an important step towards this.