Record surge in long-term sickness claims baffles experts amid mounting benefits costs

Britain’s high sickness bill has left policymakers and economists scratching their heads, with near-record numbers of workers absent for long-term health reasons costing the public purse more than £65.7bn a year.

Some 2.8 million people are now claiming disability and disability benefits, well above pre-pandemic levels, and the House of Lords Economic Affairs Committee has warned that the problem cannot be attributed solely to poor health or NHS delays. Instead, evidence suggests that the benefits system itself may be contributing to an increase in the number of claimants, at a time when total sickness support already exceeds the entire national defense budget.

A rise in mental health conditions and back problems has partly fueled this sharp jump. Official survey data from the Office for National Statistics (ONS) suggests that around 700,000 more people are out of work due to long-term illness than in early 2020. Despite the global nature of the pandemic, the UK’s unemployment rate appears to have risen more rapidly. than in many other countries.

However, the Lords Committee, after questioning senior experts, concluded: “We have received no convincing evidence that the main driver of the rise in benefits is declining health or rising NHS waiting lists.” In fact, other government data indicate that general health among the population has remained relatively stable over the past decade. While concerns remain about stagnant life expectancy and a growing number of Britons who consider themselves disabled, the committee believes there are deeper structural issues at play.

Leading researchers highlight increased incentives within the benefits system that could prompt more people to list health problems as a reason for leaving the labor market. Stephen Evans, of the Learning and Work Institute, points to tighter rules and penalties for unemployment benefits, along with a lower weekly payment, which could make up a small portion of higher-level disability compensation.

Edwin Latimer of the Institute for Fiscal Studies (IFS) agrees, pointing out that switching from unemployment to the higher-rated disability benefit could almost double a single person’s income. Although these rules are not new, the economic shock caused by the pandemic and cost-of-living pressures may be accelerating this trend, leaving more people in a category that offers neither financial disincentives nor strong support mechanisms to return to work.

Once they are classified as too sick to work, they usually receive little help from job centers, and there are few requirements for finding work. Less than one in ten people in this category receive job search support, according to Evans, and only 1% of those deemed inactive due to ill health return to work after six months.

The Lords Economic Affairs Committee is concerned that “once access to (health-related benefits) there is neither incentive nor support to find and accept employment”. This pattern undermines not only public finances, but also the long-term prospects of individuals who may recover enough to work again, but never receive the guidance or confidence to try to re-enter the labor market.

Forecasters expect the annual toll on the UK’s long-term illness bill to exceed £100bn by 2030, increasing pressure on the Prime Minister to tackle the crisis. Experts agree that there is no single explanation: some health indicators are deteriorating, but evidence directly linking waiting lists to increased benefits is scant. The design of disability benefits, combined with external shocks and personal drivers, appears to have created a perfect storm.

Stephen Evans offers a stark conclusion: “We are excluding too many people.” Solving Britain’s disease conundrum is likely to require more nuanced reforms to the benefits system, improved mental health support, and a robust range of return-to-work programs that offer real hope to those grappling with real illness – and real financial pressures.

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