UK mental health crisis sends disability benefits bill soaring, IFS says

The UK’s mental health plight has led to a rise in disability benefits spending as claims increased. 

Research by the Institute for Fiscal Studies today showed that the number of people on disability benefits rose to 6 per cent of the working age population in 2020-2021, at 2.2m, with spending soaring by 70 per cent.  

44 per cent of those on disability benefits suffered from mental health conditions, at 944,000. They made up four-fifths of the rise in disability benefit recipients over the past 20 years.

‘Over the past three decades, the fraction of working-age people claiming disability benefits has increased from 2 per cent (591,000) to 6 per cent, with much of the rise driven by growth in claims for mental health or other psychiatric problems,” said Heidi Karjalainen, IFS Research Economist and one of the authors of the research.

“This reflects an increasing rate of mental health conditions across society as a whole. If this trend continues, or is even hastened by the pandemic, it will add further pressure to disability benefit spending.”

The disability living allowance (DLA) has been replaced by personal independence payment (PIP) since 2012. This was intended to reduce disability benefits spending by 20%, but spending has instead increased. 

Spending just before the Covid pandemic was around £11bn per year, while forecasts from before the reform expected it to be around £6.5bn.

The research also showed that disabled people accounted for almost half of the UK’s most deprived working-age population, at 5m. More than a million of these disabled people do not receive disability benefits. 

“Nearly half of everyone in poverty is either disabled or lives with a disabled person,” said Peter Matejic, Deputy Director of Evidence and Impact at the Joseph Rowntree Foundation, which funded the research.