One in three people born in the UK this year is projected to develop dementia in their lifetimes, according to Alzheimer's Research UK.
The charity described the forecast as a "looming national health crisis".
The figures were based on current life expectancies and the risk of people developing dementia as they age.
However, there is acknowledgement that the figures - projecting what could be happening 100 years in the future - are only an estimate.
More than 800,000 people in the country are already affected by the disease, which is caused by the destruction of brain cells.
Age is the biggest risk factor for dementia and rising life expectancies could increase the number of people living with the condition. Heart disease, diabetes, smoking and a lack of exercise are also linked to the condition.
The charity commissioned the Office of Health Economics to make the projections.
It predicted that:
- 32% of people born in the UK in 2015 will get dementia in their lifetime
- 27% of men would get the condition
- and 37% of women
Dr Matthew Norton, from Alzheimer's Research UK, said: "These figures underline a stark reality - as people are living longer, more and more people will develop dementia in the future if action is not taken now to tackle the condition.
"It's wonderful news that each generation is living longer than the last, but it's important to ensure that people can enjoy these extra years in good health.
"Dementia is our greatest medical challenge and if we are to beat it, we must invest in research to find new treatments and preventions."
Analysis - How accurate are these projections?
By James Gallagher, health editor, BBC News website
This analysis is based on just life expectancy and the "risk" of dementia at different ages.
However, as we reported a month ago, another study came to the surprise conclusion that the risk of dementia may actually be falling in some western countries.
That has not been factored into this latest analysis and is also a warning about long-term projections.
Improvements in the nation's health overall are the most likely explanation for any fall in dementia risk.
So what happens if heart health continues to improve dramatically over the next six decades while cases of diabetes and obesity soar? What impact will that have?
Meanwhile there is no treatment that slows the onset or progression of dementia, yet there are the first hints that it might be possible with the drug solanezumab.
Last year's Office of Health Economics report showed a drug to delay dementia by five years would reduce cases by 33%.
A lot will change by the time today's newborns are collecting their pensions.
These figures are not set in stone and act as a warning of the cost of not investing in dementia research.