The UK is experiencing a significant increase in sickness benefit claims, according to recent data from the Institute for Fiscal Studies (IFS). Approximately one in ten adults of working age are now receiving incapacity or disability benefits, marking a substantial rise from pre-pandemic levels.
The number of claimants aged 16 to 64 has grown from 2.8 million before 2020 to 3.9 million in September 2024. This surge is primarily attributed to an increase in claims by younger individuals and a rapid rise in mental health-related applications across all age groups. Women also constitute a growing proportion of disability claimants.
The data reveals a 150% increase in new applications for sickness benefits among those under 40 since the onset of the COVID-19 pandemic. Monthly claims have risen from 4,500 to 11,500. Concurrently, new claims for mental health conditions across all age groups have more than tripled, increasing from 3,900 to 12,100 per month. Mental health issues now account for over a third of all claims, up from 28% pre-pandemic.
This trend has significant implications for public finances. The annual cost of incapacity and disability benefits for working-age individuals has increased by 33% in just four years, rising from £36 billion to £48 billion. The IFS projects this figure to reach £63 billion by 2028-2029, representing a record 2.1% of GDP allocated to sickness benefits.
The UK's situation appears unique among comparable nations, raising questions about the underlying causes. Eduin Latimer, an IFS economist, suggests that while the pandemic and cost-of-living crisis may have played a role, their outsized effect in the UK could be due to factors such as difficulties accessing NHS treatments or the relatively low level of basic unemployment support.
Political responses to this issue vary. Sir Keir Starmer has pledged to address the "mental health epidemic" in Labour's election manifesto, promising increased mental health support in schools and workplaces. Conversely, James Cleverly and Robert Jenrick, both vying for Conservative Party leadership, have expressed concerns about the sustainability of the current welfare budget and the need for reforms.
The government faces several options, including reducing NHS waiting lists, facilitating employment for disabled individuals, tightening benefit access criteria, or accepting the rising costs. However, the lack of clarity regarding the root causes of this increase complicates policy decisions.
This situation coincides with a broader worklessness crisis in the UK. According to the Office for National Statistics, 9.3 million adults under 65 are neither employed nor seeking work, with 2.8 million citing long-term sickness as the reason – up from 2.1 million before the pandemic.
As the UK grapples with these challenges, finding effective solutions will be crucial for both public finances and the well-being of its citizens. The unique nature of this trend underscores the need for a comprehensive approach that addresses healthcare access, mental health support, and employment opportunities.
"This is another example of the dire inheritance this Government faces – too many people are trapped on benefits and are being denied the opportunities they deserve due to ill health. We will deliver the change the country is crying out for by creating more jobs, making work pay and transforming skills, while reforming job centres and giving local areas the power they need to tackle economic inactivity."