Aims To develop a novel interactive budget impact model that assesses affordability of diabetes treatments in specific populations, and to test the model in a hypothetical scenario by estimating cost savings resulting from reduction in HbA(1c) from >= 69 mmol/mol (8.5%) to a target of 53 mmol/mol (7.0%) in adults with Type 1 diabetes in the UK. Methods A dynamic, interactive model was created using the projected incidence and progression over a 5-year horizon of diabetes-related complications (micro- and macrovascular disease, severe hypoglycaemia and diabetic ketoacidosis) for different HbA(1c) levels, with flexible input of population size, complications and therapy costs, HbA(1c) distribution and other variables. The model took a National Health Service and societal perspective. Results The model was developed, and in the proposed hypothetical situation, reductions in complications and expected costs evaluated. Achievement of target HbA(1c) in individuals with HbA(1c) >= 69 mmol/mol (8.5%) would reduce expected chronic complications from 6.8 to 1.2 events per 100 person-years, and diabetic ketoacidosis from 14.5 to 1.0 events per 100 person-years. Potential cumulative direct cost savings achievable in the modelled population were estimated at 687 pound m over 5 years (5,585 pound/person), with total (direct and indirect) savings of 1,034 pound m (8,400 pound/person). Conclusions Implementation of strategies aimed at achieving target glucose levels in people with Type 1 diabetes in the UK has the potential to drive a significant reduction in complication costs. This estimate may provide insights into the potential for investment in achieving savings through improved diabetes care in the UK.