The warning comes from a study commissioned by the Forces in Mind Trust, called 'Lifting Our Sights Beyond 2030'.
The report includes in-depth research into the transition process and concluded service leavers face "significant challenges" for years to come, unless organisations supporting the military community make changes.
About 2.4 million veterans live in the UK, with 15,000 people leaving the Armed Forces every year.
One veteran who spoke to the Forces in Mind Trust, which helps service leavers into meaningful employment, said the perception of some employers towards veterans is that they have "no transferable skills, which isn't correct".
Former Royal Air Force officer Fiona Smith left the Armed Forces 10 years ago, aged 24.
She told Forces News she found it hard to communicate her skills to civilian employers and struggled to find work.
"I can remember being on the dole, being unemployed and a well-meaning clerk said they had the perfect job for me, it was working in the town centre, fining people for dog fouling.
"People were saying: 'Oh but you're not a manager, I don't really know what you've been doing but you're not what we want.'
"My income was at rock bottom and there were times when, quite honestly, I wasn't eating properly, and I had some debts.
"I was talking to charities and saying: 'This just isn't getting any better, what can I do?' Some charities, they provide grants, other charities provide courses.
"I do wonder if these kinds of interventions should be offered sooner."
The Forces in Mind Trust, which commissioned the report, says that as a nation we can only be prepared to treat our veterans properly if we're aware of the challenges ahead.
Ray Lock, the charity's chief executive, told Forces News people have got to "understand what it is that's going to happen over the next 10 years and... take action now to change the policies".
He added that this includes changing "the way in which the Armed Forces community is served and supported to reflect the changes that we're seeing".
The changes include a decline in funding for charities that support veterans, employers failing to recognise the value veterans bring to the workforce and dwindling public support for a smaller, less visible Armed Forces.
Mr Lock said this will "impact the skills they leave the Armed Forces with".
"It's a real wake-up call to people to say that we've got to prepare for the next decade... we've to get on with it now."
A Cabinet Office spokesperson said veterans "are put at the heart of Government", and over the past year it has "launched the veteran's mental health and wellbeing service Op Courage, a National Insurance holiday for employers who hire veterans and the Veterans Railcard".
A spokesperson added: "We work with employers to make the case for the fantastic skills and experience veterans can bring to businesses and organisations.
"The Defence Transition Service also provides tailored support as personnel transition into civilian life."
Veteran and Defence Select Committee Chair Tobias Ellwood told Forces News more could be done.
"I think the Government needs to do more to celebrate what our Armed Forces do. We’re quite reticent and reserved in Britain.
He referred to the US where, if you're transferring to a new base via public transport, you're made "to wear your dress uniform and you'll see them in the airports".
"Complete strangers will go up to [them] and say 'thank you for your service', now that really makes you proud and it also encourages a younger generation."
Mr Lock agreed: "The MOD and the Armed Forces need to better prepare their people and their families for that inevitable transition into civilian life so it is successful and sustainable."