A report from equity release adviser Key showed just one in three care recipients are fully-funded.
A Freedom of Information (FOI) request to 205 local authorities found that currently councils provide support for 568,867 people aged 65-plus.
Of these, 175,256 are fully-funded and 300,287 are partially funded, while 19 councils were unable to provide information on the level of funding for 93,324 people.
But the average for England, Scotland and Wales conceals a wide range of regional differences with local authorities in the east of England the most likely to provide full funding.
On average, 68 per cent of applicants were fully-funded – four times as many as in Wales and the East Midlands where 16 per cent and 17 per cent respectively are fully-funded.
Will Hale, chief executive of Key, said: "With 1.31 million requests for care and support each year – a figure that is only going to climb – as a country, we face some tough choices around what we can afford to offer.
"Local authorities and government are under pressure and while the upcoming green paper should provide some clarification, the likelihood is that many will need to find some if not all the money needed to pay for care.
"While few people want to consider the prospect of needing care and how they might meet this cost, it is vital that they do.
"Starting to think about care funding early, speaking to their families, considering all the funding options available and getting good advice is essential.
"This will help people to crack the care code and ensure that they make considered sustainable choices about what is a very emotive topic."
Currently, those aged 65-plus make 1.31 million requests for care and support annually but they must go through a needs and means assessment to determine the level of support and funding they will receive.
Key's FOI request established that 6,882 retired homeowners are currently using deferred payment agreements (DPAs) to pay for care.
Under DPAs, homeowners use the value of their home to fund residential care and repay the local authority when their house is sold, or they die.
DPAs are most likely to be used in the west Midlands and east of England where each local authority has on average 72 and 71 in place respectively, while London has 11 and Scotland has 16 – which are the lowest on average.
Research for Key's report found just 21 per cent of those aged 55-plus have made provision for care.
Around 44 per cent said they would use savings and investments to fund some or all their care, while 40 per cent believe their pension income will be enough.
Around 19 per cent said they would need to use property wealth, which might be a more viable option as those aged 65-plus currently own unmortgaged property worth £1.1 trillion.
Commenting on whether his clients are concerned about this postcode lottery, Rajesh Modha, chartered financial planner at Leicester-based The Finance Lab, said: "My clients have assets well in excess of the cap to fund care.
"Are they concerned at present? I would answer no. It is too far away for them to contemplate. At present it is about funding schooling, university and just retirement.
"I do illustrate what long term care could look like when we discuss the different scenarios in their lifetime cashflow model, but as it's so far away I don't generally believe they take an enormous amount notice.
"I do generally find in conversation that most have resigned themselves to working much later in life. But I do believe this is somewhat affected by your social circle - employees are pessimistic, and the self-employed bullish.
"I don't believe automatic enrolment has helped much either. The small amounts that are being invested will not, for the majority, provide enough cashflow for a comfortable retirement. Whereas I feel many consider that it will."
The news comes as the government green paper setting out proposals on social care for older people to "ensure that the care and support system is sustainable in the long term" is due to be published.
It was first announced in the March 2017 Budget and is now more than 700 days overdue.
aamina.zafar@ft.com
