According to the Institute for Fiscal Studies (IFS), there has been a large increase in the payout towards health-related benefits across the last four years. Young people and those with mental health issues are amongst the groups with the greatest growth in benefit claims in the UK. The IFS noted an overall rise in health-related benefit claims throughout the UK, with a rise of 30% in claimants for disability benefits.  

The two main trends observed in their report were that the new claimants were younger and were more likely to claim benefits due to mental health problems (including learning disabilities). According to the Department for Work and Pensions, at least two-thirds of incapacity benefit claims in 2023 were for mental health problems. 

Resolution Foundation (RF), a think-tank advocating for those coming from low-to-middle incomes, warned of the decline in mental health wellbeing amongst young people. They found that people aged 18-24 years reported symptoms linked to ‘common mental disorders’ more than any other age group. Currently, one in eight young people are not in employment, education or training, according to the Office for National Statistics. In line with this, RF alleged that Personal Investment Payment (PIP) claims in 2023 had tripled amongst young people compared to 2016. 

Overall, there has been an increase in working-age health-related benefits spending. The annual spending has increased from £36 billion to £48 billion over the last three years. This trend is forecasted to continue to rise. The Office for Budget Responsibility (OBR) reported that if these trends continue, then this number could rise to £100 billion by 2030.  

Whilst the number of benefit-claimants has risen in the UK, the same cannot be said for other countries throughout Europe. There was an initial post-pandemic surge internationally, however since then the number of claims in other countries has dropped down. Where there had been a continued rise, for example in France and Norway, the rate has remained far lower at approximately 13% rise in payouts. Meanwhile, the UK has been experiencing more than double that increase, stated the IFS. 

The Labour government has made increasing employment rates one of their priorities – raising the current employment rate of 75% to 80%, according to their manifesto. They state that raising employment levels will bring down the “benefits bill.”   

One proposed initiative would be a Youth Guarantee, which would direct support towards training and apprenticeships, as well as in job seeking. The aim would be to ensure that young people are better equipped to be “earning or learning.” For example, they pledged to “guarantee two weeks’ worth of work experience for every young person.” 

The Labour government also called for a reformation of the benefits system so that it “encourages work.” They would also address the barriers that those on benefits may face when seeking employment. Momentarily, re-entering the workforce for 16 hours a week could financially set back claimants more, than if they do not work at all, analysis by the IFS found. 

However, specialists have called for a healthcare-focused approach to address the rise in benefit payouts. Nil Güzelgün from the mental health charity, Mind, stated that these trends highlighted “the acute need for mental health support.” She emphasised the 1.9 million people currently on waiting lists for NHS mental health treatments. Moreover, Christopher Rocks, of the Health Foundation thinktank, has called for “tailored support” to address ill-health, rather than a “crackdown on jobseekers.” 

The new budget was announced by the Labour government. Amongst the changes, Rachel Reeves, the Chancellor of the Exchequer, stated that investing in the NHS was made a priority and announced a £22.6 billion increase in day-to-day health spending. This funding hopes to alleviate current constraints on the NHS and to help offset current waiting lists.  

The government also revealed that benefits for those under the State Pension age will be rising by 1.7% next April. This includes Universal Credit and PIP benefits. As an additional incentive to employment, the government will be increasing the national living wage from £8.60 to £10 an hour for 18-to-20-year-olds and £11.44 to £12.21 an hour for those older. These changes will also be implemented in April 2025. 

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