What are the key findings from the new IFS report?

Two findings have received a lot of attention. First, more British people are claiming working-age health-related benefits than before COVID (out-of-work incapacity benefits such as universal credit are up 28%, and extra-cost disability benefits such as personal independent payment, or Pip, are up 39%). And while guessing the future is difficult, the Office for Budget Responsibility (OBR) forecasts this will keep rising. But we knew most of this already, partly from the IFS’s previous great work.

What’s really new is that they show the UK’s rise in claims is sharper – much sharper – than other countries. There’s no central data source for this, so the IFS searched for data country by country. Looking across Australia, Austria, Canada, Denmark, France, Germany, Ireland, the Netherlands, Norway, Sweden and the US, none of these other countries saw anything like as sharp a rise in health-related claims since COVID first emerged.

What might explain this rise in claimants?

The IFS says that two-thirds of the recent rise is because more people are starting a claim – not because the assessment has become more generous. The remaining one-third of the rise is explained by fewer people coming off benefits. But trying to explain what lies behind these is harder.

My view is that you can only understand this if you also look at wider welfare spending.

Spending on health-related benefits has gone up, but spending on other working-age benefits has gone down, so the total increase in spending is less than it seems. And the number of claimants probably isn’t that high historically.

Trends in different benefits are probably related. It’s getting harder and harder to survive on benefits unless you’re classified as having a health condition or disability.

Most claimants have genuine health conditions, so the inadequacy of benefits (and badly implemented conditionality – the set of activities and expectations people must meet in order to receive their payments), as the OBR has said) has pushed more and more people to classify themselves as disabled. Despite this, the IFS shows that England and Wales are only average in their spending on cash benefits for disabled people, and closer to the bottom end of OECD countries in spending on cash and in-kind benefits for disabled people.

But there are other things going on here, too. In particularly, rising self-reported disability. The IFS show that the UK has seen a sharper rise than other countries. This isn’t just something that affects claimants; we see the rise even among working people.

Which health conditions have been rising?

The largest absolute rise in new Pip awards is for mental health conditions. And the largest proportional rise in awards is for learning disabilities.

Surprisingly, though, there’s also been a sharp rise in claims for musculoskeletal conditions such as arthritis and back pain. So it’s not just about mental health.

Lots of people have claimed that there’s been a rise in physical ill health in recent years, but I’m not convinced by this – the evidence isn’t clear yet. What is unquestionable, though, is a rise in reported life-limiting mental health problems, particularly among young adults. In fact, this goes back earlier in life, as we know there have been sharp rises in both mental health and in social and behavioural problems in under-16s in the past decade.

But we need to be careful here. Between the 1990s and 2010s, lots more people described their distress as a “mental health problem”, but only slightly more people actually experienced mental distress. The best data shows that eight to 19-year-olds did experience a sharp rise in distress in 2017-23, but it won’t be until early next year that we get a clear picture for older groups.

Have claims been rising more for some groups?

The relative rise in Pip claims is particularly sharp for younger adults. However, this isn’t because most of the additional claimants are young. All age groups saw a similar absolute rise in the number of claims, but this means a sharper relative rise for younger people, because fewer of them used to claim.

Most claimants have relatively low educational levels and haven’t worked in the past two years (both things that overlap a lot with ill health). But there’s not a clear change over the last few years in these. Similarly, some areas of the country see much higher claim rates than others. But all areas saw similar proportional rises in claims, which means there’s no smoking gun for explaining why claims have risen.

Why are cases not rising in comparable countries?

Other countries mostly haven’t seen as sharp a rise in self-reported disability as the UK. There’s been a rise on average since before the pandemic, but the UK is at the higher end of this. But as the IFS say, this probably doesn’t explain everything, because the UK’s benefit trends are wildly different than elsewhere.

NHS waiting lists might also play a role, but the OBR has said that this is unlikely to be a major explanation of rising health-related inactivity.

The main explanation probably lies in how this rising ill health combines with deeper problems with the wider benefits system. As I said above (and in longer form in a recent report), non-health-related benefits were low and have got much lower, to the point that it’s very difficult to survive on them.

Combined with the wider cost of living crisis and attempts to make it easier to claim health-related benefits (though it’s still not that easy), it’s perhaps not surprising that more people are claiming.

What steps can be taken in the short term to ease this burden of ill health?

While the obvious answer is to restrict access to health-related benefits, this is a terrible idea. Not only is it very hard to deliver, but it ignores the causes of the problems and so will inflict a lot of pain. But there are two other things that would help.

First, there’s no point in endlessly recommending that the answer is to invest more in mental health services for young people. This does need to happen – by all accounts, the youth mental health service system (Camhs) is overwhelmed – but it’s a tiny sticking plaster that doesn’t get to the heart of the problem.

Instead, we need to create a less distressing world for everyone, and particularly for young people. Beyond tackling inequality, there are lots of very specific things that can be done in every area of British life, ranging from schools to workplaces to housing to community life.

As well as “mental health strategies” that tend to focus on treatment, it would be great to see a strategy for reducing distress that tries to pull together all the concrete steps that can be done.

Second, the benefit system needs a major overhaul. Alison McGovern, the employment minister, was talking this week about making jobcentres better places, which is really positive, but we also need to do something about the deeper structure of the system.

At heart, we give too little money to claimants who don’t receive health-related benefits. This doesn’t even provide security for those who do get health-related benefits, because of endless disability assessments that feel horrible, and because of the fear of having to cope on inadequate benefits if the assessment goes badly.

Undoing the mess of the past ten to 15 years is going to be hard, because it’s not just about raising the average level of benefits, it’s about changing the balance of who receives what. But it can be done.