Background. Little is known about the factors associated with the receipt of care by older people. This study investigates the use, costs and factors associated with service usage among people aged 65 or older living in inner London.

Method. A community-based survey, using questionnaires, examined psychiatric and physical morbidity, formal and informal care. The relationships between demographic, pathological features and the costs of health and social care were explored using multivariate regression.

Results. A total of 1085 people were interviewed at home of these 18% did not receive any service at all. The total cost of services per week for people with dementia was £109, with activity limitation £14 and with depression £12. The greatest effect of physical limitation was on the receipt of social care. Dementia had the strongest effect on receipt of social care services. Depression increased health care costs to a much greater degree than social care costs. Despite presenting to services, black elders received significantly less health care than other people with the same needs. Older people living alone were more likely to receive social care support and appeared less likely to use health services.

Conclusions. Physical dependency significantly affects both health and social care costs. Increasing cognitive impairment mainly leads to increasing social care costs. Overall costs are increased by physical dependency, dementia, depression, subjective health problems, living alone and are negatively affected by being black.