Investing £875m to teach millions of older people to use the Internet and email would deliver substantial economic and social benefits, a think tank has claimed.

Policy Exchange said it would cost £141 per person to provide training for the 6.2 million people who lack basic digital skills. But it argued the benefits in tackling loneliness would outweigh the costs, particularly when it leads to better health and a reduced likelihood of hospitalisation or the need for residential care.

It estimates the switch to digital rather than paper-based or telephone transactions alone would save £1.7bn a year.

Eddie Copeland, head of technology policy, said: ‘In an increasingly isolated and fast moving world it is vital that everyone in society is able to use the internet and understand its benefits. From alleviating social isolation, bringing together communities, paying bills and now accessing public services, online can improve lives.

‘Being able to simply write an email or access a social networking site could provide older people with a way to stay connected to their friends and families, who may live hundreds of miles away. Maintaining these important relationships will help an ageing society vulnerable to loneliness and disconnection from a fast moving modern world.’

The proposals form part of Policy Exchange’s technology manifesto, which will be launched next week.