At the moment when someone in care becomes 16-years-old they can often be forced to move into B&Bs which the group of MPs says is 'neither safe nor suitable' and should be banned.
The charity, which works with the Methodist Church, told Premier young people are not getting enough support.
Director of Public Policy Kate Mulley said: "Talking to young people what they tend to say to us is that the care system is short on care.
"That they are forced to leave and grow up too quickly, in fact faster than their peers.
"The average age of leaving home is 24.
"It should be the same for children who've been in the care system."
The Education Select Committee wants the government to change the rules so people can stay in care until they are 21.
Chair, MP Graham Stuart, said: "Looked after young people moving towards adulthood deserve a well-supported transition to independence rather than an abrupt push out of care.
"We launched this inquiry because we were concerned about the level of care and quality of support provided for older adolescents. We have now been persuaded of just how serious the problems are in this area and our report sets out the steps that must be taken to improve 16 plus care options.
"For too many looked after young people, their ambition to move to semi-independent or independent living at the age of 16 or 17 results in them being placed in accommodation that is neither safe nor suitable."
Listen to Director of Public Policy at Action for Children, Kate Mulley, speaking to Premier's Antony Bushfield: