Health as an economic asset
Unlocking the economic potential of the UK’s working-age population
Cite this publication
Aimed at informing economic and fiscal decision making, our report calls for a healthy working-age population to be recognised as an essential pillar of the UK’s economic strategy.
The UK faces a series of intertwined economic challenges: weak growth, stagnant productivity, a sluggish labour market and pressure on the public finances. Rising economic inactivity has prompted greater awareness of working-age ill health, although improving health is still not treated as core to the government’s economic strategy.
Our report aims to shift the dial on how we think about health – moving from treating ill health as a cost to seeing good health as a national economic asset. Improving health would strengthen growth, expand the tax base, reduce fiscal pressures and raise living standards.
To illustrate the economic potential of better health, our report models a scenario that restores health to 2014 levels – equivalent to an approximately 10 percentage point reduction in the share of adults with a long-term condition. We estimate that this would:
- unlock £57bn in additional annual economic output (or 2% of GDP)
- ease pressure on the public finances equivalent to an annual £40bn increase in tax revenue (roughly equivalent to a 5p rise in the basic rate of income tax)
- deliver an £18bn reduction in welfare spending (26% of working-age spend on health and disability benefits).
The greatest gains in living standards would be realised by the lowest income households. Economic gains in some areas, such as the North East and South West, may be moderated by the strength of local labour markets, reflecting the need to align local strategies for boosting economic growth and improving health.