Britain’s Soaring Sickness Bill Sparks Concerns Over Benefits System

Britain’s rising sickness bill, now costing the public purse more than £65.7 billion annually, has raised alarms among policymakers and economists. With nearly 2.8 million people claiming incapacity and disability benefits, the number of workers absent on long-term health grounds has surged far above pre-pandemic levels.

The House of Lords’ economic affairs committee has warned that the problem cannot be solely blamed on deteriorating health or NHS delays. Instead, evidence suggests that the benefits system itself may be contributing to the rise in claimants, with sickness support now surpassing the entire national defence budget.

The increase in mental health conditions and back problems has partly driven this sharp rise. Official data from the Office for National Statistics (ONS) reveals that around 700,000 more people are now out of work due to long-term sickness than in early 2020. Despite the global nature of the pandemic, the UK’s incapacity rate has increased more rapidly than in many other countries.

However, after questioning leading experts, the Lords committee concluded that there is no convincing evidence to suggest that deteriorating health or high NHS waiting lists are the main drivers of the increase in benefits. Government data also shows that overall health in the population has remained relatively stable over the past decade, although concerns persist about stagnant life expectancy and the growing number of people self-reporting as disabled.

Instead, experts are highlighting deeper structural issues within the benefits system. Stephen Evans, from the Learning and Work Institute, pointed out that tightened rules and sanctions for unemployment benefit, combined with a lower weekly payment, are pushing more people toward incapacity benefits, which offer a higher income. Eduin Latimer from the Institute for Fiscal Studies (IFS) agrees, noting that switching from unemployment benefits to incapacity benefits can double a person’s income.

This shift is particularly concerning given the lack of support for those claiming health-related benefits. Once individuals are classified as too ill to work, they typically receive little help from job centres, with less than one in ten claimants receiving job-hunting support. Furthermore, only 1% of those deemed inactive due to illness return to work after six months.

The Lords’ committee expressed concern that once individuals begin receiving health-related benefits, there is little incentive or support to return to the workforce. This lack of guidance not only burdens public finances but also undermines the long-term prospects of individuals who may recover and be able to work again, but never receive the support to do so.

Forecasts suggest that the UK’s long-term sickness bill could exceed £100 billion by 2030, adding pressure on the Prime Minister to address the growing crisis. Experts agree that no single factor is to blame, but the structure of incapacity benefits, along with external shocks like the pandemic, has created a perfect storm. Solutions will likely require reforms to the benefits system, improved mental health support, and better back-to-work programmes that offer real hope for those struggling with illness and financial pressures.