Plans have been announced for young people in foster care to be able to stay with their foster family until they are 21 instead of 18.
Some will be able to stay until they are 25 if they are completing an agreed programme of education or training.
The Welsh Government believes the new arrangements will help ensure young people do not experience a sudden disruption to their living arrangements, which can have a negative impact on their education, training or employment or in developing their skills to live independently.
The changes are being introduced as part of wide-ranging reforms to Welsh social services in April 2016, when the Social Services and Well-being (Wales) Act 2014 comes into force.
More than two fifths of children are being separated from their siblings every year in Wales because of the lack of foster parents.
That's according to the findings of a freedom of information request by charity Action for Children.
The charity says splitting up siblings can cause feelings of loss, abandonment and can affect mental health.
At least 550 foster families are needed across Wales this year to provide stable, secure and loving homes, according to the Fostering Network.
The charity says foster families are needed to ensure the record number of children who come into foster care find carers who are right for them and are available now.
More foster families are particularly needed to provide homes for children with disabilities, sibling groups and teenagers.
Freda Lewis, director of the Fostering Network Wales, said:
"Children and young people come into care for a wide range of reasons, but all come needing professional, dedicated and compassionate support.
"Foster carers are remarkable people who open their homes to some of society's most vulnerable and disadvantaged children and young people. Fostering services are working really hard to find more foster carers, but recruitment remains an ongoing challenge."
Figures show more than 4,000 children are already living with over 3,500 foster families in Wales.
Foster families who have experienced problems arising from foster children leaving home too soon have told ITV News the law must change.
Currently children as young as 16 in foster homes are being told they have to leave and live an independent life - but charities say that can have a devastating effect.
The Welsh Government says it is already working on a pilot scheme, 'When I Am Ready', to enable young people to remain with their former foster carers beyond the age of 18.
Responding to calls to raise the age at which youngsters are made to leave foster care, the Welsh Government says an 'increased age' pilot scheme is underway.
It said: "Work has already begun with the WLGA and ADSS Cymru to introduce the 'When I am Ready' scheme in pioneer areas to enable young people to remain with their former foster carers beyond the age of 18.
"The scheme offers young people choice and control over their placement and gives them support when they decide they are ready to move on.
"Many of these young people have already had disrupted lives and they may lack the stable support network needed to move on to independent living, yet they can find themselves moving out of their foster family home when they are much younger than their peers.
"Local authorities are already under a number of statutory duties to prepare and support young people leaving care to make the transition from care to independent living.
"'When I am Ready' pilots are underway until next spring and we will use the lessons learned in these areas to develop guidance to apply across Wales.
Local authorities will then need to find ways to implement the scheme in their areas and reflect this in their commissioning of placements for 18 to 21-year-old care leavers."
- Action for Children's report 'Chance to Stay' reveals young people who stay in foster care achieve more qualifications (55%) and are less likely to be involved in alcohol and substance misuse than those who leave by the age of 18.
- The report also reveals that those who leave care at 18 could cost the UK and Welsh Governments an estimated £131,000 more per person in benefits and public service support than those who leave care later.
- Currently young people in care must leave at the age of 18, and some as young as 16, even if they do not feel ready to live alone. The average age other young people choose to move out of the family home is 24.
Action for Children's chief executive says most parents 'wouldn't dream' of asking their children to leave home unless they were ready to - and believes children in the care system should be afforded the same privilege.
Fostering and children's charities wants to change the age young people leave foster care.
Currently young people must leave at 18 but a campaign is calling for the Welsh Government to raise the age to 21.
The Welsh Government say a pilot scheme is already in place.
A leading foster care provider has warned that Wales is on course for a fostering crisis.
Action for Children says there's already a shortage of carers here - and the problem's getting worse, because many potential carers don't think that they're eligible to foster.
Its research found that half of people in Wales wrongly think those over the age of 55 can't foster.
36 percent think you can't do it if you live in rented accommodation - and 12 percent believe men can't be the main carer.
Former Dragons' Den star Richard Farleigh told Daybreak he views foster care as "society's band-aid".
Farleigh, who was taken into foster care at an early age, said fostering "repairs cases and puts children back into society".
He said being fostered "completely changed my life":