The shortfall in the annual care budget is likely to be higher than the 6 billion pounds predicted by the government before the start of the recession, the report added.
Care services can expect "significant real-terms cuts" as higher demand erodes small budget rises, the report added.
Councils face higher costs and more demand for services, while their income is falling. Charities have seen donations fall, while the private sector is vulnerable to rising costs and reduced access to capital.
The number of people aged over 85 will double by 2026 to almost two million, while those aged over 100 will have quadrupled, the report said. For every person aged over 65, there are about four people under 65. That figure is expected to fall to three by 2029.
As well as living longer, more people in care are expected to need treatment for conditions such as obesity and dementia.
* Full report: www.kingsfund.org.uk/publications/index.html
(Editing by Stefano Ambrogi)