The cost of caring for people with mental illness is expected to rise from £22.5 billion to £47 billion by 2026, experts have warned.
A report from the influential think tank, the King's Fund, found that more investment was needed to help people get back to work.
It said mental illness cost £50 billion in England in 2007, with £22.5 billion of that spent on NHS and social care services.
Another £26.1 billion represented the estimated cost to the economy of lost earnings. Thousands of people are unable to work because of their mental illness.
The cost of lost earnings is projected to rise to £41 billion by 2026. Taken together with the £47 billion cost of NHS and social care, the total bill for England will be £88 billion.
The year-long study, called Paying the Price, said the prevalence of most mental disorders, including schizophrenia, is likely to remain stable over the next 20 years.
However, the increasingly ageing population means dementia is expected to rise massively over the same period, up by almost two-thirds (61%) from 582,827 to 937,636 people.
This will have a huge impact on the cost of caring for people with mental illness.
But the report's authors point out potential savings, such as improving early detection and treatment of dementia and paying for more mentally ill people to be treated earlier, thereby cutting the need for admission to hospital.
Professor Martin Knapp, co-author of the report, said: "We found that paying for more people to be treated would create net savings as reductions in lost employment costs would outweigh treatment costs."
