Some 34% of UK adults are unaware of the cost of residential care, with the average person anticipating a weekly setback of £377, when it is often over £1,000.
That amounts to a difference of £31,000 each year, according to home care service provider HomeTouch, which carried out the research.
It was also found that 65% of people have not put any provisions in place for loved ones, while just 7% have discussed care plans with a family member in need.
"The findings show just how unprepared and uninformed we are about caring for elderly relatives," HomeTouch CEO, Dr Jamie Wilson, said.
"Care can be an emotive topic and one that many of us understandably resist, but it is best to explore options early and discuss them with your loved ones if you can."
Research from Newcastle University shows that an additional 353,000 people in the UK aged 65 or over will have substantial care needs by 2025.
However, the Care Quality Commission has deemed 32% of residential care homes in Britain inadequate or in need of improvement.
This may explain why HomeTouch found that 45% of people do not trust the quality of care homes in the UK, and a further 39% would not consider putting a family member in a home.
Half of those surveyed cited a lack of trust in others looking after family members as the main reason for this.
It was also found that 26% of Britons would prefer a live-in than residential carer for a family member, but that 12% are unaware that it is even an option.
It is finding and retaining carers for loved ones that is one of the biggest challenges people face in caring for relatives, according to William Laing, founder of healthcare market intelligence provider, LaingBuisson.
However, he adds: "With ever-increasing costs for residential care, the efficiencies new technologies can offer for live in care for the elderly will be key to solving the care crisis."