A new report from the Institute for Fiscal Studies (IFS) has highlighted a sharp increase in benefit claims driven by mental health issues following the COVID-19 pandemic.
Figures reveal that the number of working-age adults receiving disability benefits in England and Wales has surged from 2 million in 2019 to 2.9 million, with mental health conditions now a significant contributing factor. Of this increase, half a million people have cited mental health as their primary reason for claiming benefits.
The rising number of claimants has led to a substantial increase in the UK’s welfare bill. Health-related welfare payments for individuals aged 16 to 64 reached £48 billion last year, marking a £12 billion increase compared to pre-pandemic levels. Economists predict that these costs will continue to climb, potentially reaching £68 billion by the end of the decade.
The surge in benefit claims is adding further strain to public finances as Chancellor Rachel Reeves faces pressure to meet fiscal targets ahead of the Spring Statement later this month.
Eduin Latimer, an economist at the IFS, explained that the growing expenditure on health-related benefits is linked to worsening mental health across the population. “More than half of the rise in disability benefit claims is due to mental health and behavioural conditions,” he noted. “This not only represents a concerning trend on its own but may also be contributing to the escalating benefits bill.”
Currently, there are 4 million working-age adults receiving health-related benefits, up from 2.8 million five years ago. According to IFS findings, 44% of these claimants report mental health or behavioural conditions as their primary health issue. Additionally, 86% of all health-related benefit recipients report some form of mental health issue, even if it is not the primary reason for their claim, based on data from the Department for Work and Pensions.
In response to the rising welfare costs, Work and Pensions Secretary Liz Kendall is exploring ways to reform the system. Her department is reportedly considering reassessing more benefit claims to encourage individuals to return to the workforce, rather than remaining on long-term benefits.
The surge in mental health issues is also exacerbating pressure on the NHS. According to the IFS, 2 million people were in contact with mental health services by the end of last year, a one-third increase compared to 2019. The number of people prescribed antidepressants has risen by 12% over the past five years, while “deaths of despair” – encompassing alcohol, drug-related deaths, and suicides – have increased by 25% in 2023 compared to the average rate between 2015 and 2019. The IFS attributes this rise to a significant deterioration in mental health.
A government spokesperson stated, “We are committed to reforming the welfare system to make it fairer for taxpayers and to help those who are able to work find employment. Without reform, more people will remain out of work, which harms the economy and individuals. We will shortly outline our proposals as part of our plan for change.”
The government also emphasized its focus on improving mental health services, with plans to recruit an additional 8,500 mental health workers to address delays and ensure timely treatment. This is part of a broader commitment to treat mental health with the same priority as physical health.
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