According to the inquiry, almost 25 percent of persons over 65 and 40 percent people over 85 suffer from depression or serious symptoms of depression. In addition, 20 percent of those over 80 suffer dementia. The report also gave that there are higher rates of suicide in people over the age of 75.
In spite of this, the inquiry concluded, older people with mental health problems are often ignored and receive little support.
Experts say that two-thirds of older people with depression never even discuss it with their GPs, and of the third that do discuss it, only half are diagnosed and treated.
Also, when they are diagnosed, older people are less likely to be offered treatment. The inquiry also said that some GPs believe depression is simply a symptom of growing older.
In 2006, a review of progress against the government's National Service Framework for Older People found that rampant age discrimination had not declined in mental health services. The panel had found that people over the age of 65 often received different, lower cost and inferior services to younger people - even if they had the same condition.
According to Dr June Crown, chair of the inquiry, mental health problems in later life are often preventable and treatable.
"Action to improve the lives of older people who experience mental health difficulties is long overdue.
"Current services for older people with mental health problems are inadequate in range, in quantity and in quality.
"Our report draws attention to groups of older people who are currently invisible in the UK, who have been denied the fair treatment that should be a hallmark of a civilized society", she was quoted.
"What we are very concerned about is that older people don't get necessarily treatment for their depression even when they do report it to GPs.
"And if they do they're much less likely to be offered counseling and psychotherapy and are much more likely than younger people to be given tablets", Crown added.
Says Gordon Lishman, director general of Age Concern who supported the inquiry: "The inquiry shows the true scale of the problems, but it also gives hope for the future in the shape of practical steps that can help the millions of older people suffering from a mental health problems."
Marjorie Wallace, chief Executive of the mental health charity Sane supports his views: "The standards of wards for elderly people with mental illness can be shocking, mixing patients with illnesses like depression and conditions like dementia.
"We entirely agree that age should not be a barrier to treatment for conditions such as depression and anxiety, which can be as successful with older people as with those in younger age groups", she strongly opines.