Councils will need billions of pounds in funding increases over the course of the next parliament to finance adult social care, an economic thinktank has found.

The Institute for Fiscal Studies (IFS) said a hike in costs was mainly the result of an ageing population, growing numbers of disabled adults and rising wages.

Local authorities depend primarily on council tax and business rates to fund their spending, and a growing gap is likely to emerge between revenue raised and the rising cost of service provision, the IFS reported.

Its analysis suggested that if council tax rises in line with inflation, local authorities will need an extra £4bn a year from central government between now and 2024-25 and £18bn a year by the mid-2030s to maintain social care services at their current level.

If council tax were to rise by 4% a year, twice the rate of inflation, local authorities are likely to need an additional £1.6bn a year in real-terms funding in five years’ time.

David Phillips, the author of the report and an associate director at the IFS, said: “The additional funding announced for councils next year could be just a lull in the storm. Detailed public spending plans for 2021-22 and beyond have not yet been published.

“But we do know that councils will rely on council tax and business rates for more of their funding going forwards … those revenues just don’t look like they will keep pace with the rising costs of services like adult social care – even with council tax bills going up at 4% a year, which is double the rate of inflation.

“That means finding billions more in funding to top up existing local tax revenues, even before thinking about new initiatives like free personal care.”

Caroline Abrahams, Age UK’s director, said: “The problems facing social care are national, but for too long successive governments have left local councils to carry the can. That’s been grossly unfair to local communities and above all to older and disabled people, more than 1.5 million of whom now have some unmet need for care.

“This is such a big problem now that to have credibility at this election every political party that aspires to govern needs to bring forward a policy to fix care, once and for all.”

People over-65 are expected make up a fifth of the UK population by 2030, according to the charity.