NHS England is to tackle “shockingly low” dementia diagnosis rates over the next two years, the health secretary Jeremy Hunt has announced.

The UK Government’s wants to see the 160,000 people who are unknowingly living with the condition identified and treated, in what it is calling an “overhaul” of the diagnosis of the condition.

The plans, announced as the UK Prime Minister David Cameron's ‘Challenge on Dementia’ reached its first year, will aim to see two-thirds of people with dementia identified and given appropriate support by 2015, an increase from 39% in 2010 and the current average of around 45 per cent.

There are currently 670,000 people with dementia in England, but 350,000 of those people remain undiagnosed and without access to support.

With the number of people with dementia set to double in the next 30 years and costs expected to rise to £19 billion, improved diagnosis will be key if the system is to cope effectively with the predicted surge in numbers, according to the government.

Focusing on driving up diagnosis will also help remove the existing postcode lottery, which sees some areas with rates as low as 32 per cent. Currently the best performing local area is identifying 67% of people.

The health secretary Jeremy Hunt explained: “For too long diagnosis rates have been shockingly low, leaving too many people living in the dark trying to cope with this terrible condition undiagnosed, unable to get the help they need and deserve.

“Dementia is a serious and growing problem so this ambitious drive to see a clear majority of people identified and supported is a major step forward. I am pleased that NHS England has set a clear direction and sent a message to the NHS that we must do more. I fully support every GP, doctor and health worker who accepts this challenge.”

The plan is part of the PM’s Challenge on Dementia, bringing together the government, NHS, social care, research, science and the charitable sector. The Challenge, launched a year ago, is focused on transforming how the country deals with dementia, including:

The drive to improve diagnosis will be led by the 211 Clinical Commissioning Groups working with local health and well-being boards. Supported by NHS England, they will be provided with advice on improving diagnosis and setting up additional memory services where they are needed.

Jeremy Hughes, chief executive of the Alzheimer’s Society, said: “The past year has seen huge progress in the fight against dementia. We’ve rallied schoolchildren, bankers, doctors, care workers and more to change the way we treat people with the condition. But the fight is not nearly over. Less than half of people with dementia have a diagnosis, denying them the support they need to live well.

“[The government’s] announcement is a welcome step towards fighting that. It’s not just about diagnosis. We need a change in the way society thinks, talks and acts about the disease […] all of us have a part we can play in defeating dementia.”