Objective: To estimate the cost-effectiveness of a national immunization program against seasonal influenza targeting children aged one to five years and adults aged 65+ years. Methods: Dynamic models simulate the indirect effect of vaccination conferred by herd protection, therefore, in order to estimate the population effect of vaccination against influenza, a transmission model comprising annual age classes was developed to model the effects of age-specific infection, morbidity, and mortality due to seasonal influenza. The structure of the model followed the susceptible-latent-infected/morbid-recovered schema for each age class. Transition between age classes was modelled by either jumps to the next age class between influenza seasons, or at a continuous rate. Assumptions concerning antigenic drift of the influenza strain were incorporated in the model as the waning of vaccine-acquired immunity between successive influenza seasons. Health benefits were estimated using person-years with influenza. Further developments are intended to extend the outcome measures to include Quality-Adjusted Life Years. Cost analysis was from a societal perspective in the UK, however extension to other settings can be performed. Results: Assuming 60% vaccination coverage of the target population in an influenza season, the ratio of person-years with influenza to the initial population size is 0.99% for no vaccination and 0.85% with vaccination. This indicates that in the UK, vaccination could prevent approximately 84,000 person-years of influenza, which corresponds to 2,184,000 influenza episodes per season, assuming infection lasts 2 weeks. The incremental cost per person-year with influenza, with vaccination versus no vaccination was £149. Conclusion: Initial results indicated that the national immunization program targeting children aged 1-5 years and 65+ adults could be highly cost effective.