Mental ill health is behind soaring disability benefits bill in England and Wales, report says

More than half of the increase in disability benefits is due to more mental health claims, according to research.

Since the pandemic, the number of working-age adults in England and Wales paid disability benefits has increased by nearly 1 million people to 2.9 million in 2024, with 7.5% of 16-64 year olds claiming.

A report by an influential economic thinktank, the Institute for Fiscal Studies (IFS), has calculated that around 500,000 of this rise is due to more claims for mental ill health.

Whereas in 2002, mental health or behavioural problems were the main condition for 25% of claimants, it had risen to 40% by 2019 and has accelerated further since Covid-19. In 2024, the proportion of those receiving disability benefits whose main condition was a mental or behavioural problem had reached 44% (some 3.3% of the working-age population). It means that “55% of the post-pandemic rise in disability benefits can be accounted for by claims primarily for mental health”, the IFS report states.

The government is expected to announce sharp cuts to the personal independence payment (Pip), the main disability benefit, arguing the bill for disability benefits, which rose by nearly £13bn to £48bn between 2019-20 and 2023-24, is unsustainable.

Pip is not means tested or linked to employment status, but is meant to help people with the extra costs of their disability, with claimants getting £1,500 to £9,610 a year, depending on their assessed level of disability.

But the IFS’s assessment of the growth in those claiming disability benefits, concludes that there is “compelling evidence that mental health has worsened since the pandemic” and that deteriorating mental health has contributed to these increases in the disability benefit bill.

One factor is stubbornly high mortality rates in England and Wales, with death rates 5.5% in 2023 above the 2015-19 average, most of these due to alcohol, drugs or suicide.

The report, funded by the Joseph Rowntree Foundation and the Health Foundation, calculates that after adjusting for demographic changes, there were around 3,700 more deaths in 2023 due to alcohol, drugs and suicide among working-age adults, compared with before the pandemic.

Those with mental health conditions are at much higher risk of deaths from these causes, so the increase in mortality from these causes also indicates increased prevalence of severe mental ill health, the study states.

Sickness absence rates per worker were 37% higher in 2022 than 2019 – providing further evidence, the IFS says, that population health has worsened.

In all, the report calculates that around 13-15% of working-age people had a long-term mental health or behavioural condition. Demand for mental health services is up more than 36% on pre-pandemic levels, it calculates, with 2 million people in contact with NHS mental health services in December 2024.

Eduin Latimer, research economist at IFS and an author of the report, said the evidence in the report suggested “mental health across the population has worsened” and “may also be contributing to the rising benefits bill”.

Responding to the study, Brian Dow, deputy chief executive of Rethink Mental Illness, said: “The pandemic put a spotlight on the nation’s mental health, and this research highlights why it must remain a national priority. Mental health services are struggling to meet growing demand, with long waits leading to suicide attempts, A&E visits, and the loss of livelihoods.

“Growth won’t come from slashing benefits for the most unwell or cutting essential services – it comes from improving access to timely mental health treatment. We also need to urgently develop a better understanding of the complex reasons behind why more people are experiencing mental health problems, with an increased focus on preventing people from becoming unwell in the first place.”

Iain Porter, senior policy adviser at the Joseph Rowntree Foundation, said: “Greater openness about mental health has helped many people to live with conditions which were once hidden, but the rise in deaths from alcohol, drugs or suicide also shows that reducing stigma does not eliminate the most serious consequences of rising mental ill health. This trend is real and growing, and we need our government to look carefully at the health of the nation, rather than relying on benefit cuts to fix the problem.”