Abstract Background The COVID-19 pandemic has significantly impacted the mental health and wellbeing of older populations across Europe, exacerbating feelings of loneliness and social isolation, known risk factors for poor physical and mental health outcomes. This study aims to understand the extent and implications of these changes in Latvia and Iceland, providing essential insights for targeted public health interventions. Methods This comparative study utilized data from two key sources: the Survey of Health, Ageing, and Retirement in Europe (SHARE) for Latvia and the HL20 study for Iceland, focusing on individuals aged 67 and above. Both quantitative surveys were conducted during the pandemic, offering data on health status, loneliness, and social isolation. A novel approach was applied in analyzing older populations to standardize comparisons between the two distinct datasets. This methodological innovation is part of a bilateral EEA initiative FM2021/23 aimed at strengthening research collaboration between Latvia and Iceland. Descriptive statistics and the Pearson Chi-square test were used to compare outcomes between the two countries and within demographic subgroups. Results The study revealed stark differences between the two countries: 80% of Latvian older adults reported social isolation compared to 42.7% in Iceland. Similarly, 45% of Latvians experienced loneliness versus 30% of Icelanders. Significant associations were found between social isolation, loneliness, and deteriorating mental and physical health, with worse outcomes noted in socially isolated individuals. Conclusions Our findings demonstrate a clear link between social isolation and adverse health outcomes among the older adults, exacerbated by the COVID-19 pandemic. The study supports the need for proactive public health measures in Latvia and Iceland, including the development of community engagement programs and mental health support services tailored to the needs of older adults. Key messages • Study shows significant health impact of social isolation among older adults in Latvia and Iceland, highlighting urgent need for targeted public health interventions. • Effective public health strategies and innovative digital outreach can mitigate adverse effects of loneliness and isolation observed in older populations.