Purpose The incidence of osteoporotic fractures is increasing with an ageing population. This has potential consequences for health services, patients and their families. Treatment of osteoporotic vertebral compression fractures (OVCFs) has been limited to non-surgical measures so far. The social and functional consequences of balloon kyphoplasty, a recent development for the treatment of VCF, were assessed in this cohort study. Methods Data collected prospectively from 53 patients undergoing balloon kyphoplasty for symptomatic OVCF in our hospital's spinal unit were compared with data from an historical age-matched group of 51 consecutive patients treated conservatively for symptomatic OVCF. Social functionality was recorded prior to the injury, and at 6-month and 1-year follow-up; mortality was recorded at 6 months and 1 year. Results The mortality rate in the balloon kyphoplasty group was 11 % (6/53) at 1 year post-OVCF, versus 22 % (11/51) in the conservatively treated controls. A drift to a lower level of social functionality (defined by a lower level of independence) was observed at 1 year in 21 % of patients in the balloon kyphoplasty group versus 53 % of patients in the conservatively treated group. A drift to a lower level of independence was noted in 67 % of the conservatively treated patients who started at a lower level of functionality versus 20 % drift in a similar group who were treated with balloon kyphoplasty. Conclusions The reduction in mortality and drift in social functionality at 1 year following treatment with balloon kyphoplasty suggests that it is a viable option for the management of OVCFs.