Health-related benefit claims have risen substantially across every part of England and Wales, according to a new Institute for Fiscal Studies (IFS) report.
Every local authority in England and Wales, apart from the City of London, has seen an increase in claims since 2019.
The IFS report found that the number of working-age people getting health-related benefits in England and Wales has increased from 2.8 million in 2019/20, or 7.5% of the working-age population, to 3.9 million in 2023/24, or 10% of the working-age population.
That represents growth of 38% in four years, with official forecasts suggesting further growth by 2028. Real-terms spending on health-related benefits in Great Britain increasing by £12bn over that period.
However, the IFS said there was “little evidence” of a similar trend of an increase in health-related benefit claims in comparable countries, with there generally being “falls or little change” in numbers on such benefits.
The increase in England and Wales has been concentrated in local authorities that already had a high number of health-related benefit claimants before the pandemic, with the rises in each area approximately proportional to the number in 2019/20, the IFS said.
In Merthyr Tydfil and Blackpool, for example, which the IFS described as areas of poorer population health, around 15% of 16–64-year-olds were in receipt of a health-related benefit in 2019/20, compared to 19% in 2023/24.
Conversely, in Windsor & Maidenhead and Wokingham, 3% were receiving one of these benefits before the pandemic, with 4% in 2023/24. There are 20 local authorities where more than 15% of 16- to 64-year-olds claim health-related benefits, up from two before the pandemic.
The report, which was funded by the Joseph Rowntree Foundation and The Health Foundation, also found that despite recent increases, the UK’s spending on working-age health-related benefits is similar to that of the comparable countries analysed. The UK now spends 1.7% of GDP on health-related cash benefits – up from 1.3% before the pandemic, but around the OECD (2019) average of 1.6%.
However, the IFS said that if recent trends continue as forecast the UK would likely become one of the higher spenders on health-related benefits amongst comparable countries.
In England and Wales, there has been a shift towards claims from younger individuals and claims for mental health conditions. The number of new disability benefit awards made to under-40s has grown by 150%, from 4,500 a month in 2019/20 to 11,500 in 2023/24.
The growth for 40-64-year-olds was 82%, from 11,000 to 20,000 a month. 37% of new claims are now primarily for mental health conditions, up from 28% before the pandemic. While young people are much more likely to claim for mental health reasons, there has been a substantial shift towards claims for these conditions at all ages, the report found.
Eduin Latimer, research economist at IFS and an author of the report, said: “The recent rise in health-related benefit claims is creating a fiscal headache for the government, and of course is a bad sign about population health. Two simple candidate explanations – that this is just driven by the pandemic or the cost-of-living crisis – are hard to square with the lack of similar trends elsewhere.
“It seems likely that these shocks have played a role, but it may be that they have an outsized effect in the UK – perhaps because of difficulties in accessing NHS treatments, or the relatively low level of basic unemployment support in the UK.
“The crucial point is that it is not yet known what factors are driving this increase. Figuring out what is behind the recent rise must surely be a top priority for the government if it is going to be able to respond appropriately.”
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