Thousands of new graduates going straight to long-term sickness

Tens of thousands of students are going onto long-term sickness straight from graduation, a new report has found.

The joint report from the NHS Confederation and the Boston Consulting Group, which looked at people’s routes into long-term sickness, found that students were now one of the biggest contributors. In 2021-22, 63,392 people went straight from being economically inactive because they were studying to being inactive through long-term sickness – up from 36,866 in 2019-20.

While the rate had fluctuated before the pandemic, the figures show a 24% rise since 2014 and an average annual net increase of 5.5%, with rising numbers of students moving into long-sickness, while the figure for those moving from sickness to study is more constant.

The trend is being driven by increasing rates of mental ill-health, the report’s author said.

There are now a record 2.8m people off work as a result of long-term sickness, up 700,000 since the Covid-19 pandemic. The cost of sickness benefits is due to reach £64 bn by the end of the parliament, up £30 billion on before the pandemic.

Britain is an ‘outlier’

The report notes that Britain is an international outlier. While rates of long-term sickness in the rest of Europe have remained the same, or fallen, since the pandemic, in Britain the rate has increased by 27%. One in every 15 people of working age is now off work, owing to long-term illness, a rate 69% higher than Germany and more than twice Italy’s level.

Liz Kendall, the work and pensions secretary, said that “spiralling inactivity is the greatest employment challenge for a generation” and that reversing it is an important part of Labour’s plans to improve economic growth.

Reversing even part of the impact of economic inactivity, the report says, would save taxpayers £19.5 billion a year by the end of the decade through lower benefit spending and higher tax receipts. The boost to the wider economy would be even bigger, at £62.6 billion.

Raoul Ruparel, author of the report, said: “Those aged 16-24 who are long-term sick inactive with multiple conditions has grown by 18% since pre-Covid, making them the fastest growing group of those out of the workforce. This is largely driven by an acceleration of mental health conditions post-Covid. It is no coincidence then that the numbers of those moving directly from being students to being economically inactive has grown rapidly — these flows have more than tripled since pre-Covid.”

Matthew Taylor, chief executive of the NHS Confederation, said the trend amongst students “paints a concerning picture.” He added: “Not only is this meant to be the healthiest section of the population but those who spend a prolonged period out of work at the start of their career have been shown to have materially lower income and productivity for the rest of their lives.”

Taylor continued: “The UK faces a series of enormous health challenges as seen in the sharp rise in the number of people out of the workforce due to long-term sickness. This spike has defied European trends and requires both additional investment in the NHS alongside coordinated and sustained action across government. Getting this right will lead to a more productive NHS, support more people to be in work and provide a major boost to the economy. Failure risks rising waiting lists and the proportion of public spending spent on the NHS crowding out other forms of investment, which will then only weigh down the economy.”

Kendall is planning a white paper on tackling economic inactivity, which is expected to focus on devolving powers to local mayors to join up employment, health and skills support services.