Record anxiety-related disability claims surge under Labour, CSJ report finds

A record number of people in Britain are claiming disability benefits tied to anxiety and mood disorders, according to a new analysis from the Centre for Social Justice. In July, almost 650,000 people were receiving Personal Independence Payments for anxiety and mood disorders, with roughly 250 people per day being awarded the benefit under Labour since last year’s general election.

The CSJ notes that more than 44,000 people have been handed PIP for mental health since the general election, equating to about 250 new claimants every day. The report also shows 60,000 people aged 16 to 24 were on PIP for anxiety, depression and mood disorders in July, with 1,407 under 25 awarded the benefit that month.

Analysts say rising benefits reflect more young people relying on welfare streams rather than paid work. Ben Gregg, a senior researcher at the CSJ, said the trend risks leaving young people isolated and dependent on benefits. He urged the government to redirect funding toward addressing the root causes of mental ill health, noting that the welfare system should be a bridge to work rather than a barrier to opportunity.

Data from the Department for Work and Pensions show 3.83 million people were claiming PIP in England and Wales at the end of July, up almost 100,000 since Labour’s welfare reform climbdown. The government’s attempt to trim the benefits bill by £5 billion at the start of July was dropped after a revolt by Labour backbenchers. PIP reform proposals were shelved pending a welfare review led by Sir Stephen Timms, even as official forecasts warned that without reform the number of PIP claimants could rise to about 4.2 million by the next election and costs could climb from £21.8 billion to £34.1 billion by 2029.

The British Chambers of Commerce warned that the UK risks becoming the sick man of the G7 if long-term sickness continues to weigh on growth. About 7 percent of the workforce is out of work due to long-term sickness, contributing to an estimated £130 billion in lost economic output. The chamber called for reforms to the fit-note system and a wage subsidy to help young people with long-term health conditions enter work.

The CSJ has proposed a plan to withdraw universal credit health and PIP from roughly 1.1 million people with milder anxiety, depression or ADHD to save about £7.4 billion by 2029/30. The proposal has backing from former ministers Lord Blunkett and Jeremy Hunt.