Amid global shifts towards family-based alternatives, China persists with prevalent institutional care, drawing attention to concerns surrounding caregiving practices. Official data indicates a substantial population, approximately 27.36% of all childcare recipients, living in state-funded care institutions, prompting an exploration of the risks factors faced by these young individuals. This study focuses on exploring risk factors of living in institutions, providing a unique perspective often absent in existing literature—the voices of the care-experienced youth themselves. It included 34 young people who had lived experiences in institutional care. Participants were interviewed to gather their experiences of living in care. Thematic analysis reveals that the overriding risk factors during young people’s living in care range from care identity and parental absence to substandard living conditions, unqualified caregiving, excessive domestic responsibilities, institutional neglect of education, environmental instability, and physical impairments. These challenges contribute to unfavourable outcomes during the transition to adulthood. Therefore, this study concludes that institutional care is suboptimal for children and young individuals in need of genuine care. Based on the findings, practical implications are provided for policymakers and practitioners to make improvements. Nonetheless, ongoing research is essential to contextualise care experiences within current policies, ensuring lessons from historical accounts guide future efforts to enhance the lives of young people in care.