What we know about the UK’s working-age health challenge

More working-age people in the UK are living with long-term health conditions than ever before. For many, poor health means not being able to work. There are currently more than 2.6 million working-age people who are out of the labour market due to long-term sickness, with sharp increases since the beginning of the COVID-19 pandemic. In addition to putting many more people at risk of poverty and worsening health, according to the Office for Budget Responsibility, rising health-related inactivity since the pandemic (alongside rising ill health among those in work) will cost the Treasury nearly £16bn in additional welfare and health care support and lost tax revenue in 2023/24.

These trends have put the health of the UK workforce in the political spotlight. Since the Spring Budget 2023, the government has announced several initiatives intended to support and encourage more people with health conditions back into work. These include establishing up to 50,000 work placements for disabled people, and consulting on plans to expand access to occupational health services. The government has also set out plans to review and ultimately replace the Work Capability Assessment, which determines whether someone is eligible for Universal Credit payments without having to prepare for work (for example by attending career planning sessions) or look for work.

However, the scale of the labour market challenge is substantial. For over half of working-age people living with a long-term health condition, around 8 million, their poor health is ‘work limiting’, meaning it restricts the types or amount of work they can do. Furthermore, recent research by the Health Foundation's REAL Centre suggests that the poor health of the working-age population is not going away. It projected a 17% rise in the proportion of people aged 20–69 years (an additional 0.5 million people) living with major illness by 2040. Poor health will add to pressures on public finances, and have implications for employers too, as illness is associated with more days of sickness absence and reduced productivity.

Building a healthier workforce will require long-term thinking and coordination across government, along with action from employers across every sector in the economy. In view of this, the Health Foundation is announcing an independent Commission for Healthier Working Lives to examine the factors behind the rising tide of ill health and develop proposals to support people to stay working and healthier for longer. This long read sets out the major trends in workforce health over the past decade and examines the inequalities between people, sectors and places.

Two key challenges: labour market inactivity and more workers with poor health

The proportion of working-age people who report having a long-term health condition has risen consistently over the past decade. As Figure 1 shows, since 2013, there has been a 6 percentage-point increase in the proportion of people aged 16–64 years who report having a health condition lasting 12 months or more.

As the prevalence of long-term health conditions has risen, so has the proportion of 16–64-year-olds reporting health conditions that affect the kind or amount of paid work they can do. Compared to 10 years ago, the number of working-age people with work-limiting health conditions has grown by 2.0 million, representing an increase from 15% to 19% of the working-age population.

Against this backdrop of declining health, government attention has been focused on a sharp increase in labour market inactivity since the beginning of the pandemic. Figure 2 shows the net change in working-age inactivity since the first quarter of 2020. Between the first quarter of 2020 and the second quarter of 2023, the number of working-age people inactive due to long-term illness increased by around 470,000. This number has grown more quickly over the past 3.5 years than it has done since the mid-1990s. Previous analysis from the Health Foundation has shown that the pattern of rising health-related inactivity was being driven by workers aged 50–54 years, whereas health-related inactivity remained flat for workers aged 65–69 years, between 2014 and 2022.

However, with the focus on the rising labour market inactivity, less attention has been given to the increase in ill health across the wider working-age population, including among those in employment. There are now nearly as many people in employment who report work-limiting conditions as there are inactive in the labour market (3.7 million and 3.9 million, respectively). Figure 3 shows that this represents a significant shift from a decade ago, with 1.4 million more employed people with work-limiting health conditions.

Across the full population, ageing plays an important role in explaining declining outcomes across some measures of health. Analysis from the Health Foundation’s REAL centre shows that as people are living longer, more people are due to live with major health conditions for a longer period of time.

However, although an ageing population contributes to the decline in working-age health, the decline is primarily driven by increasing prevalence of health conditions across all age groups. In 2023, 20.4% of working-age adults in work were in the 55–64 years age bracket, a slight increase from 17.9% in 2013. This means the ageing of the working-age population only accounts for around 15% of the rise in work-limiting health conditions over the past decade. The remaining 85% can be explained by rising levels of reported illness.

Work-limiting health conditions are not experienced equally across all demographics. Figure 4 provides a breakdown by age, sex, educational level and ethnicity. In each of these domains, there are significant inequalities to be found.

Older workers report work-limiting conditions at a higher rate than younger workers. However, the likelihood of reporting a work-limiting condition does not increase proportionally with age. Whereas people aged 16–34 years and 35–44 years report similar rates of work-limiting conditions, this increases sharply for workers aged 45 years and older.

Overall, 22% of working-age women report having a work-limiting condition, compared with 17% of men. The proportionally higher rate among working-age women also holds across all age groups.

The prevalence of work-limiting health conditions is consistently higher among people with lower education attainment, especially those without a university degree or equivalent. This partly reflects a ‘social gradient’ where people with more opportunities in the labour market tend to experience better health outcomes. It can also highlight that people with higher qualification levels are more likely to experience better employment conditions, which can make it easier for them to remain in work if their health deteriorates.

There are also differences between ethnic groups. Breaking the prevalence of work-limiting health conditions down by ethnicity reveals that working-age people of Bangladeshi ethnicity are most likely to have a work-limiting condition, followed by those of white and Pakistani ethnicity.

There is also often overlap between the groups associated with a higher risk of reporting work-limiting health conditions. The Health Foundation will be publishing further analysis of the intersections of these characteristics and their relationship with working-age health.

Looking at employment shares across broad sectors, the distribution of workers with work-limiting conditions generally mirrors employment patterns across the wider economy.

Figure 5 contains two charts. The first shows the percentage of workers in each industry who have a work-limiting health condition, while the second compares the distribution of workers with and without work-limiting health conditions across industries. As the first chart shows, there are relatively few people with work-limiting health conditions in banking and finance, manufacturing and construction, with fewer than 10% of workers in the most recent data. The highest rate of workers with work-limiting health conditions can be found in the agricultural, public administration and ‘other services’ industries.

Figure 6 shows the distribution of workers with work-limiting health conditions across occupations. People in professional or managerial roles are less likely to report having work-limiting conditions. As Figure 6 shows, 8.3% of managers and senior officials report having a work-limiting health condition, compared with over 16% of people working in sales or customer service roles.

It is important for policymakers to consider how different types of work interact with, and perhaps worsen, health, and how employers across different sectors can best adapt to the changing needs of the workforce. The findings presented here only delve as far as broad sector or occupational groupings and there is also significant variation in role demands within sectors and occupations. Further research and engagement with employers and worker representatives will provide more understanding in this area.

Looking at trends by age, Figure 7 shows that the proportion of people in work with work-limiting health conditions has risen across the board. The starkest rise has been among the younger age group of 16–34-year-olds, where the rate of work-limiting health conditions has approximately doubled over the past 10 years. This means that a 16–34-year-old employed in 2023 is as likely to report a work-limiting health condition as someone aged 45–54 years was a decade ago, and a similar likelihood to a 35–45-year-old today.

For workers aged 45–54 years and 55–64 years – the age groups with the highest proportion of people with work-limiting conditions – musculoskeletal and chronic disease remain the main causes of work-limiting conditions. However, as shown in Figure 8, there has been a notable increase in reported ‘other’ conditions, now ranking as the third most common condition that affects the amount and type of work that people in these age groups can do.

Although it is possible that this ‘other’ category is capturing some of the effect of long COVID on the workforce, this is unlikely to provide a full explanation. While reports of long COVID are becoming less prevalent at a population level, the share of people reporting ‘other’ conditions has been rising steadily across all age groups since before the pandemic. Exploration of administrative health data will help to shed further light on the health conditions driving these trends in working age ill health.

For younger workers, the picture is even more stark. The number of workers aged 16–34 years who report that their mental health limits the type or amount of work they can do has increased more than four-fold over the past decade.

Mental ill health is now the most common cause of work-limiting conditions among those aged 44 years and younger. This represents a significant shift from 2013, when mental health conditions were less prevalent as a cause of work limitations among younger workers, and ranked behind both musculoskeletal and chronic conditions.

While increased awareness of and changing attitudes towards mental health may play a role in this shift, evidence from diagnostic questionnaires also indicate a rise in mental ill health over the past decade, corroborating self-reported data. In any case, changes in both reporting and perception are likely to influence how people interact with the labour market and their expectations from the workplace. Therefore both employers and policymakers will need to take a proactive approach to addressing rising mental ill health among the workforce.

A key question for the future will be understanding how these higher reported rates of work-limiting conditions among younger workers will affect progression, pay and inequalities over the life course.

As we have seen, there are now more people reporting work-limiting conditions in employment than ever before. In theory, this could be positive, reflective of a society where people living with health conditions are more able to earn a living and enjoy successful and rewarding careers. However, there are reasons that policymakers should be concerned.

Despite there being more people with health conditions in work, there remains a persistent employment gap between those who report work-limiting conditions and those who do not. In the second quarter of 2023, 47% of 16–64-year-olds with a work-limiting health condition were in employment, compared to 83% of people without such conditions. This means there was an employment gap of 36 percentage points. While this is down from 38 percentage points in the second quarter of 2013, this headline gap remains significant.

Employment rates also vary by type of work-limiting health condition. Figure 9 shows that, despite improvement over the past decade, the employment gap remains widest for people with mental ill health. This is also the fastest rising cause of work-limiting conditions across the workforce.

It is possible that the rise in mental ill-health prevalence could be influenced by higher reporting of less severe mental health conditions, which might partially explain why the employment gaps for mental health have reduced across all age groups over the past decade. However, even among the 16–34 age group that saw the biggest reduction, the employment gap for mental health remains at about 32 percentage points – a wider gap than for any other type of health condition among that age group. On the positive side, increased reporting of heath conditions may improve our ability to capture health outcomes that have a negative impact on labour market outcomes, and therefore put measures in place to better support people.

There are also potential longer term implications. Given the age profile of prevalence of mental health conditions is skewed towards younger workers, more workers with work-limiting health conditions in the formative early parts of their careers could have a knock-on effect on their future pay and progression prospects. It could also increase the risk of future instances of work-limiting health conditions later in their career, particularly given the recurring and variable nature of mental health conditions.

Over and above the relationship of work-limiting health conditions to labour market inactivity, policymakers have a further reason to pay attention to the rise in work-limiting health conditions for people in-work. Having a work-limiting condition is also related to lower hourly pay. The ‘health pay gap’ for full-time workers is £2.50 per hour, corresponding to a 15% pay gap.

This simple ‘health pay gap’ isn’t a perfect measure given we aren’t accounting for the different characteristics, such as education, that exist between people with and without work limiting health conditions. However, it does help to shed light on how people with and without work-limiting health conditions fare when in work and how existing UK work structures support the different groups.

The highest health-related pay gaps can be found among men in the 45–54 years and 55–64 years age groups, with pay gaps of 20% and 21% respectively.

While a gender pay gap persists regardless of health, the pay gap between women with and without a work-limiting condition is lower than is the case for men. At least in part this is likely to reflect the greater likelihood of women working in lower paid roles, and on the wage floor, regardless of health.

Looking at the broader category of those with long-term health conditions, poorer health is also related to taking more days of sickness absence, which collectively can harm business performance and reduce economic output. For the individual, repeated absence could also negatively impact their longer term career and earning prospects.

As Figure 11 shows, after two decades of steady decline, sickness absence rates have recently increased to the highest level since 2005. Of the 186 million days of sickness absence taken in 2022, 58% were taken by those with long-term health conditions, despite this group forming only 31% of the employed population.

Furthermore, sickness absence doesn’t capture the full impact of ill health on business performance. As research by the University of Sheffield has shown, poor physical and mental health are predictive of ‘dysfunctional presenteeism’, in which an employee in poor health is significantly less productive while at work. This same research showed that dysfunctional presenteeism was more common among smaller employers and those outside of the public sector, illustrating the need for all types of employers to provide workplace support to keep employees healthy.

Rising working-age ill health has the potential to widen geographic inequalities. As Figure 12 demonstrates, higher rates of work-limiting disability are correlated with higher rates of deprivation. Areas with the highest prevalence of ill health and high levels of deprivation include Hastings, Hyndburn and Blackpool.

Without action to address the causes and impacts of rising ill health, there is a danger that these areas will get left even further behind. Improving understanding of how geographic variations in health relate to variations in inactivity and differences in local labour market conditions will be key to developing effective solutions.

As well as leaving more people at risk of poverty and hardship, declining workforce health threatens to hamper productivity, add to the pressures on public finances and harm employers across all sectors of the economy. Although the government has made some early strides in providing employment support for people with health conditions, there are limits to what can be achieved without concerted cross-government action. Indeed, many of the levers that government has to affect working-age health, such as changing who can access social security or the employment support that they receive, or requiring businesses to provide occupational health services to employees, would require legislative change.

Therefore, it is incumbent on policymakers and employers to be looking ahead to the long term. It remains to be seen whether the number of people leaving the labour market due to poor health continues to grow. But as this analysis shows, the UK’s problem with working-age health isn’t solely a matter of labour market inactivity, nor is it solely a hangover from the COVID-19 pandemic. For the first time since Labour Force Survey records began, there are now approximately as many people with work-limiting conditions in work as there are out of the labour market. More than four times as many young workers report that their mental health affects the type or amount of work they can do, than was the case only a decade ago. And although employment gaps between those with and without health conditions are closing, people with work-limiting conditions are still more likely to earn less, live in areas of higher deprivation and face educational disadvantages.

As the Commission for Healthier Working Lives gets underway, it will explore these trends in greater depth. The new Commission will aim to build a consensus on the action needed to address the decline in working-age health. It will create a better understanding of health trends and inequalities – and their impact on individuals, employers and the economy. It will make recommendations for action to improve working-age health, and to help more people with health conditions get the support they need to access, remain and thrive in the workforce.

For more information on the Commission for Healthier Working Lives or to sign up for updates, visit the Commission webpage.