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A report from the Resolution Foundation suggests that the number of individuals exiting the workforce due to long-term sickness has reached its highest level since the 1990s.
According to the report, the count of economically inactive adults due to ill-health surged from 2.1 million in July 2019 to a peak of 2.8 million in October 2023.
This rise marks the “longest sustained increase” since records began in 1994-1998. Although the government claims recent Budget measures could add 300,000 workers to the labor force, concerns persist regarding the growing number of individuals unable to work due to health issues.
The report highlights that both younger and older individuals comprise the majority of those out of work due to ongoing illnesses. This trend could have significant implications for individuals’ living standards and career trajectories, according to Louise Murphy, a senior economist at the Foundation.
Despite a slight decrease to 2.7 million in December 2023, the UK remains the only G7 economy that has not returned to its pre-pandemic employment rate. The upward trajectory in long-term sickness began before the pandemic, extending over 54 months, the report notes.
Data from the Department of Work and Pensions (DWP) reveals a substantial increase in claims for disability benefits, particularly for Personal Independence Payment (PIP), a non-means tested benefit for individuals with health conditions. Claims for PIP rose by 68% from 2020 to 2024, with notable increases in new claims among individuals aged 16-17.
The Foundation warns of broader implications on NHS and welfare spending if the nation’s health is not improved and economic inactivity is not reduced. It emphasizes the prevalence of mental health disorders and musculoskeletal problems among benefit claimants, citing DWP’s data on medical conditions recorded on Work Capability Assessments.
In response, a spokesperson for the DWP highlighted positive economic indicators and government initiatives aimed at boosting employment. Chancellor Jeremy Hunt announced reforms in November, including stricter fit-to-work tests and jobseeker support, with the goal of getting 200,000 more people into work. Plans also include scrapping the controversial Work Capability Assessment and investing £1.3 billion over five years to assist nearly 700,000 people with health conditions in finding employment.
Shazia Ejaz from the Recruitment and Employment Federation (REC) underscored the impact of long NHS waiting lists on workforce participation and advocated for improved infrastructure in transport, childcare, and social care to address the inactivity challenge.
