Rising dementia rates in an aging population are set to cost the country billions of dollars.

That's amongst the findings in a newly released report looking at how the disease is set to have an economic impact over the next 20 to 30 years

Minister for Seniors Maggie Barry said it's fair to say dementia is one of the country's biggest health challenges.

LISTEN ABOVE AS MINISTER FOR SENIORS MAGGIE BARRY SPEAKS WITH MIKE HOSKING

"The estimated cost last year was $1.7 billion and that's projected to increase to $4.5 billion by 2050."

The new report commissioned by Alzheimers New Zealand is forecasting the number of people with the disease will almost treble to over 170,000 people by 2050.

Alzheimers New Zealand chair Dr Ngaire Dixon said making changes to deal the the problem now, and delaying the entry of dementia sufferers into residential care, could bring cost-benefit ratios greater than six times the investment.

She's challenged Barry, telling her the Government has a great opportunity to procure the cost-benefit ratios, it just has to implement a framework.

"Steps must now be taken to address this major challenge. We need to plan for the challenges that are coming."

Barry has agreed that we need to start planning for the future.

"We do need to be very aware of what is coming so that we can plan for it. I don't know that we need to fear it, but I do absolutely believe that we need to understand it" she said.