Background Participation in cognitive and physical activities may help to maintain health and wellbeing in older people. The Agewell study explored the feasibility of increasing cognitive and physical activity in older people through a goal-setting approach. This paper describes the findings of the cost-effectiveness analysis. Methods Individuals over the age of 50 and attending an Agewell centre in North Wales were randomised to one of three conditions: control (IC), goal-setting (GS), or goal-setting with mentoring (GM). We undertook a cost-effectiveness analysis comparing GS vs IC, GM vs IC and GM vs GS. The primary outcome measure for this analysis was the QALY, calculated using the EQ-5D. Participants’ health and social care contacts were recorded and costed using national unit costs. Results Seventy participants were followed-up at 12 months. Intervention set up and delivery costs were £252 per participant in the GS arm and £269 per participant in the GM arm. Mean health and social care costs over 12 months were £1,240 (s.d. £3,496) per participant in the IC arm, £1,259 (s.d. £3,826) per participant in the GS arm and £1,164 (s.d. £2,312) per participant in the GM arm. At a willingness to pay threshold of £20,000 per QALY there was a 65% probability that GS was cost-effective compared to IC (ICER of £1,070). However, there was only a 41% probability that GM was cost-effective compared to IC (ICER of £2,830) at a threshold of £20,000 per QALY. Conclusion Setting up and running the community based intervention was feasible. Due to the small sample size it is not possible to draw a firm conclusion about cost-effectiveness; however, 2 our preliminary results suggest that goal-setting is likely to be cost-effective compared to the control condition of no goal-setting, the addition of mentoring was effective but not cost-effective.