New analysis by the Health Foundation estimates that an increase of 900,000 people in unemployment expected by the end of the year, compared to before the pandemic, will lead to 200,000 more people with poor mental health in the UK. It is therefore estimated that by the winter there will be a total of 800,000 (or 2 in every 5) unemployed people with poor mental health.

The Health Foundation’s research highlights the link between unemployment and poor mental health. It acknowledges that while government action to reduce a rise in unemployment by extending the furlough scheme to September will support mental health, the benefits system and employment support programmes currently fail to properly account for the mental health needs of those who are unemployed. However, the independent charity says there is now an opportunity to ensure that efforts to tackle unemployment in the pandemic recovery are designed to better support mental health.

During the first wave of the pandemic, the Universal Credit system coped with an unprecedented level of claims. The analysis explains that the easing of conditions for receiving Universal Credit over this period, and the smoothing of the claims process, helped to mitigate some of the immediate stress and uncertainty for people making claims. However, with the easing of conditions now ended there is a risk that failing to recognise people’s needs will negatively impact their mental health.

The analysis also notes that the design of government schemes to reduce unemployment - such as JETS and RESTART – should be improved to consider the impact they might have on people’s mental health. This is vital given the greater likelihood of poor mental health among the groups targeted by these schemes. And while moving from unemployment into employment often helps reduce poor mental health, moving from unemployment into poor quality work has been shown to lead to a deterioration in mental health. Therefore, a focus on job quality is also essential.

Based on the findings, the Health Foundation says that employment programmes must be designed to a high standard, with regular and intensive support to provide stability for individuals. And providers must be held accountable to outcome measures that include mental health and wellbeing, and the quality of work placements. There should also be a focus on providing personalised support from Jobcentre Plus tailored to the mental health needs of people making claims, the easing of job search conditions and the continuation of policies that have made claiming simpler.

David Finch, Senior Policy Fellow at the Health Foundation said:

‘The government’s COVID-19 recovery plans are rightly focused on tackling the expected rise in unemployment. Ensuring that more people are in work could help avert a major increase in poor mental health. However, more can be done to support the mental health of unemployed people and prevent a potential drag on future prosperity.

‘A first step to ensuring that the social security system provides an adequate income and is making the temporary £20 uplift to Universal Credit permanent. But the government can also do more to account for the mental health needs of those in unemployment by easing conditions around claiming benefits, providing more personalised support, and improving the design of employment programmes, holding providers accountable for better mental health outcomes.’

The Health Foundation’s analysis identifies the groups who were most likely to be unemployed in January 2021, this includes younger people, men, ethnic minorities and lower skilled workers who were all more likely to be unemployed than other parts of the population. It also shows that the risk of poor mental health in January 2021 was higher for unemployed people (43%) than people in work (27%) or on furlough (35%). This suggests that furloughing may have offered some protection for mental health.

Media contact

Simon Perry
020 7257 2093

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