Rise in economic inactivity due to ill-health sparks concerns

A report says that the number of people exiting the workforce due to long-term illness is at its highest since the 1990s.

A recent report from the Resolution Foundation has revealed a concerning trend in the UK labor market, with the number of adults economically inactive due to ill-health reaching a peak of 2.8 million in October 2023. 

This marks the “longest sustained rise” in such inactivity since records began in 1994-1998.

Impact on UK Labor Market:

The rise in long-term sickness has significant implications for the UK labor market, as it leaves the country as the only G7 economy that has not yet returned to its pre-pandemic employment rate. 

Despite slight improvements, with inactivity figures falling to 2.7 million in December 2023, the upward trend in economic inactivity due to ill-health has persisted for 54 months.

Age Disparities:

The report highlights that people at both ends of the age spectrum are disproportionately affected by long-term sickness. 

Younger and older individuals together account for the majority of the rise in overall economic inactivity, raising concerns about the impact on individuals’ living standards and career prospects.

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Financial and Healthcare Strains:

The increase in claims for disability benefits, particularly for Personal Independence Payment (PIP), underscores the severity of the issue. 

Claims for PIP have risen by 68% from 2020 to 2024, with a notable increase among individuals aged 16-17. This trend not only poses financial challenges but also places additional strains on the National Health Service (NHS) and welfare spending.

Addressing Mental Health and Musculoskeletal Issues:

The report emphasizes the prevalence of mental health problems and musculoskeletal issues among benefit claimants, as highlighted in Work Capability Assessments. 

Addressing these underlying health conditions is crucial to reducing economic inactivity and promoting overall well-being.

Government Response:

While the government has introduced measures in the recent Budget to boost the labor force by an estimated 300,000 workers, there is a pressing need for comprehensive strategies to address the root causes of economic inactivity due to ill-health. 

Failure to improve the nation’s health and reduce economic inactivity could lead to wider societal and economic challenges in the long term.

In summary, the rising trend of economic inactivity due to ill-health underscores the importance of prioritizing public health initiatives and support systems to ensure the well-being and economic participation of all individuals in the UK.