BackgroundPsychological therapy groups for people with dementia are widely used, but their cost-effectiveness has not been explored.AimsTo investigate the cost-effectiveness of an evidence-based cognitive stimulation therapy (CST) programme for people with dementia as part of a randomised controlled trial.MethodA total of 91 people with dementia, living in care homes or the community, received a CST group intervention twice weekly for 8 weeks; 70 participants with dementia received treatment as usual. Service use was recorded 8 weeks before and during the 8-week intervention and costs were calculated. A cost-effectiveness analysis was conducted with cognition as the primary outcome, and quality of life as the secondary outcome. Cost-effectiveness acceptability curves were plotted.ResultsCognitive stimulation therapy has benefits for cognition and quality of life in dementia, and costs were not different between the groups. Under reasonable assumptions, there is a high probability that CST is more cost-effective than treatment as usual, with regard to both outcome measures.ConclusionsCognitive stimulation therapy for people with dementia has effectiveness advantages over, and may be more cost-effective than, treatment as usual.