Taxpayers Face £10billion Bill for Rising Number of Pensioners Claiming Around £70,000 of Disability Benefits Each for the Rest of Their Lives Despite no Longer Working
Disability Benefits Cost Could Rocket, Report Says
The cost of some disability benefits could “soar” unless action is taken to improve the health of people about to retire, research suggests.
The annual bill for pensioners claiming Personal Independence Payment (PIP) benefits could jump by 75% to £10.5bn by 2033, say pension consultants LCP.
A rise would be driven by increases in heart disease, back pain, mental illness and other health problems.
Ministers say extra funding will better support those with long-term illness.
The report authors say early interventions such as an expansion of the NHS Health Check programme, targeted mental health treatment and low-cost devices to monitor conditions such as type 2 diabetes, are needed to reduce the future welfare bill.
“The prospect of large numbers of people going into retirement on long-term disability benefits is not in the interests of the individuals concerned or the taxpayer,” says Dr Jonathan Pearson-Stuttard, head of health analytics at LCP.
The number of people in the UK not in work because of a long-term health problem has increased sharply since the pandemic and is continuing to rise each month, according to the latest figures from the Office for National Statistics.
The data shows a jump in musculoskeletal disorders such as back pain and arthritis among older individuals, and a spike in mental health problems, particularly in those under 50 years old.
What is PIP?
In total, 3.3 million adults in Britain now receive PIP to help with the extra cost of living with a health condition or disability.
The number has increased by about one million over the last decade and is forecast by the Department of Work and Pensions (DWP) to rise by another million over the next three years.
PIP is designed as a working-age benefit and most people cannot make a new claim after they reach the state pension age of 66 years old.
But those already receiving it at that point can continue to get the monthly support payments after they retire.
The research from LCP, a firm of business consultants which specialises in the pension and health sectors, forecasts the total number of pensioners claiming PIP will rise from about one million today to 1.6 million by 2033.
On average, those individuals are likely to draw the benefit for another 11 years at a total cost of about £70,000 per person over that time.
It says the rise in those living with a long-term health problem now – in their 50s and early 60s – risks a “soaring” welfare bill in the future as that group reaches retirement age and continues to claim benefits.
Dr Pearson-Stuttard, the report’s co-author, says more needs to be done to prevent a “disability benefit timebomb” from emerging.
“More targeted interventions, particularly focused on areas of greatest deprivation and highest health needs, could pay off many times over in terms of benefit savings and gains to the wider economy,” he said.
“If just one less person needs to claim PIP through retirement the saving is likely to be around £70,000 and that money could be better spent keeping people well.”
Ministers say a new major conditions strategy, published in August, is designed to better prevent conditions, like cardiovascular disease and musculoskeletal disorders, responsible for the highest levels of ill health in England.
“We’re also investing an extra £2bn to help more people with disabilities and health conditions into work and grow the economy,” said a government spokeswoman.