This paper considers the processes and circumstances that create vulnerability among older people, specifically to a very poor quality of life or an untimely or degrading death. Models of ageing processes are used to define vulnerable older people as those whose reserve capacity falls below the threshold needed to cope successfully with the challenges they face. Compensatory supports may intervene to mitigate the effects of challenges and to rebuild reserve. The dimensions of reserve, challenges and compensation are discussed, with emphasis on demographic and other influences on the availability of family and social support. Policy initiatives to reduce vulnerability can focus on each part of the dynamic process that creates vulnerability, namely, ensuring that people reach later life with ‘reserve’, reducing the challenges they face in later life, and providing adequate compensatory supports. The promotion through the lifecourse of healthy lifestyles and the acquisition of coping skills, strong family and social ties, active interests, and savings and assets, will develop reserves and ensure that they are strong in later life. Some of the physical and psychological challenges that people may face as they age cannot be modified, but others can. Interventions to develop compensatory supports include access to good acute care and rehabilitation when needed, substitute professional social and psychological help in times of crisis, long-term help and income support. Our knowledge of which interventions are most effective is however limited by the paucity of rigorous evaluation studies.