Mental Health Costs the UK £70bn a Year – But Workers Pay the Real Price

Written by:
Michael Englefield
Content Manager at Drewberry™

With the launch of Mental Health Awareness Week next week and recent efforts by the Royal Family and various sporting foundations to raise awareness, most of us should by now know that one in four of us will suffer from a mental health condition at some point in our lives.

According to recent research from the Chartered Institute of Professional Development (CIPD) the proportion is even higher among Britain’s workers, with 1 in 3 employees reportedly experience a mental health problem at work.

Facing up to these statistics raises important questions about how employers can promote wellbeing and good mental health in the workplace, as well as whether the millions of British sufferers can do anything to mitigate the potential financial impact of a mental illness.

 

Let’s Get Visible – Making Mental Health a Prominent Issue

It should go without saying that mental health problems are health problems too. But all too often mental health is ‘invisible’. This is partly down to the nature of the illnesses, but it also comes down to the fact that mental health simply isn’t discussed in the same way as physical health.

In the workplace, this is usually because employees don’t feel comfortable talking about such issues. The mental health charity Mind found that just 5% of people who’d required time off work due to mental illness actually admitted this was the reason for their absence with 44% claiming their absence was down to an upset stomach instead.

Unfortunately, this appears to mean we still live in a country where we’re less embarrassed telling their boss they have diarrhoea than a mental health problem. This needs to change.

Tom Conner
Director at Drewberry

 

Insurer Claims Statistics

 

When choosing our personal protection we want to know it is going to pay out when we need it to.

By choosing a product or specific insurer from the menu below you will be able to view the claims payout rates for all of the main UK insurers for income protection, life insurance and critical illness insurance.

Insurer
2014
Percentage of Successful Claims
2015
Percentage of Successful Claims
2016
Percentage of Successful Claims
Critical Illness Insurance
Aviva
93.2%
92.5%
92.3%
Legal & General
92.2%
91.5%
92.6%
Liverpool Victoria
88%
91%
90%
Zurich
91%
92%
90%
Friends Life
94%
93%
-
Scottish Provident
94%
-
-
Aegon
93%
97%
95%
Bright Grey
94%
-
-
Royal London
94%
93%
92.2%
AIG
-
91.4%
92.3%
Income Protection
British Friendly
96.7%
97.8%
97%
Exeter
94%
94%
94%
Cirencester Friendly
94%
94%
94%
Aviva
93.2%
92.4%
92.6%
Legal & General
93.9%
95%
94.4%
Liverpool Victoria
85%
92%
90%
Zurich
93%
87%
85%
Friends Life
86%
84%
-
Aegon
92%
85%
85%
Vitality Life
-
-
94%
Royal London
90%
94%
95.6%
Holloway Friendly
96%
96.9%
98%
Shepherds Friendly
96.7%
97.6%
97%
Life Insurance
Aviva
99%
98.9%
98.9%
Legal & General
98.30%
97.9%
98.6%
Liverpool Victoria
98%
97%
98%
Zurich
99.8%
98.5%
98%
Friends Life
99%
99%
-
Aegon
98%
98%
98%
Scottish Widows
99%
98.9%
99.4%
Vitality Life
-
99%
99%
Royal London
98%
98%
96.8%
AIG
-
92.2%
95%
 

Supporting Employees With Mental Health Conditions in the Workplace

Fortunately, employers are gaining greater insight into the severity and depth of mental health problems and their associated costs. Consequently, many are becoming more willing to address the impact of mental health problems for both them and their employees.

Employers who are sympathetic to these issues have several options. A Group Health Insurance plan, for example, can include psychiatric cover, which can speed up diagnosis of a mental illness and, in many cases, offer much faster treatment than the NHS.

Given the uncertain state of NHS funding, PMI has become a popular benefit for employers to offer and is highly-valued by employees.

Emma Wilson
Employee Benefits Consultant at Drewberry

Meanwhile, Group Income Protection policies, where an employer takes out insurance to cover their employees’ wages if they’re unable to work, is also an option.

Modern insurers also offer access to health and wellbeing services such as Aviva’s Employee Assistance Programme or EAP. Since the start of 2016, this has included access to an app designed to provide staff with immediate access to support, particularly if they’re experiencing anxiety or depression.

 

Well employees are more likely to be engaged and productive employees. Providing your staff with immediate access to support services like EAP reduces the risk of them taking time off work which has an impact on them, their families and your business. Sickness absence costs UK employers an estimated £9bn a year, and this figure doesn’t include the impact of presenteeism – employees who remain unwell at work without adequate treatment and support. EAP services are extremely valuable, offering support to people in all areas of their lives, whether it’s pressure at work, a relationship breaking down or money worries.

Jon Blackburn
Rehabilitation Services Manager at Aviva

“Having convenient and easy access to instant support on your smartphone should help drive up the number of people who access these fantastic services,” continues Jon Blackburn. “People can use their phones to access their banking, instant message friends on the other side of the world and watch live TV – it’s only right that they can now access important support services and information when they need them most.”

Raising Awareness of Income Protection Insurance

How much income are you putting at risk?
Your Current Age
Monthly Expenditure
 

The cost of mental illness

Mental illness is by far the most common single cause of disability claims in the UK: 46% of all Employment and Support Allowance (ESA) claims are due to mental health problems.

With this in mind, it’s no wonder that mental health problems cost the UK economy around £70bn annually in lost working days, productivity and healthcare according to the OECD. This dwarfs the £12.1bn a year cost of back pain in the UK and is around four and a half times the annual cost of cancer to the UK economy.

Of course, the real financial cost of mental health is born by individuals. Indeed, for the almost 800,000 people claiming ESA due to their mental health, the maximum weekly benefit they’ll receive is just £109.65. For someone earning the average UK wage – £26,468 – this is an 80% drop in annual income.

Few of us could cope with this sort of financial shortfall, but for those facing mental health problems a sudden onslaught of financial worries like these could be catastrophic.

 

Help at Hand for Those With Mental Health Problems

For many people worried about losing their income in the event of a mental illness, a sensible solution could be to take out Income Protection, which will cover most of your outgoings if you become too ill to work – whatever the reason might be.

Income Protection is designed to pay out should you be rendered medically incapable of doing your job for any reason whatsoever, including mental health problems. It will also cover a far higher proportion of your earnings than you’ll receive if you’re forced to rely solely on ESA.

Jeremy Cornford
Independent Protection Expert at Drewberry

Mental health issues are one of the largest single cause of Income Protection claims in the UK. 2016 protection claims statistics from Aviva, one of the UK’s largest Income Protection Providers, revealed that 28% of successful Income Protection claims last year were as a result of mental health problems, including stress, anxiety and depression.

These statistics are worrying, which is why we put together a guide to help people decide whether they need Income Protection, which also includes a handy calculator to show you how much income you could be putting at risk.

Sadly, government support for people too ill to work is tiny and could yet shrink further with future benefit cuts. Relying on the state will only leave you out of pocket. So it pays to look for cover while you’re still in good mental health. Although insurers generally won’t insure those who’ve suffered a mental health issue in the last five years, they still exclude your family history when it comes to this important area of cover.

Tom Conner
Director at Drewberry

 

Actual Income Protection Claims

 

The table below details real life stories of how an income protection policy has saved someone financially following an illness which left them unable to work.

The information is from Liverpool Victoria's 2011 claims, it demonstrates how anyone can lose their income, regardless of age, gender or occupation, LV's youngest claimant in 2011 was just 22 years old.

Age at Claim
Gender
Occupation
Length of Claim
Cause of Claim
Last Monthly Benefit
Total Payout So Far
31
Male
Carpet Fitter
15 years
Brain damage from road traffic accident
£303.00
£55,449.00
43
Male
Accountant
7 years
Cyst removed from the Brain
£3,194.00
£255,520.00
46
Female
Veterinary Surgeon
12 years
Arthritis
£369.00
£51,291.00
48
Male
Estate Agent
14 years
Heart Attack
£4,883.00
£805,695.00
48
Male
Doctor
1 year
Depression
£3,357.00
£53,712.00
49
Male
Physiotherapist
3 years
Depression
£1,942.00
£73,796.00
48
Male
Quantity Surveyor
7 years
Stroke
£2,528.00
£207,296.00
51
Female
Marketing Consultant
2 years
Breast Cancer
£2,434.00
£48,680.00
59
Male
Solicitor
1 year
Parkinson's Disease
£2,156.00
£26,452.00
Source: http://www.lv.com/upload/IFA-Rebrand-2009/pdf/2012/aug/212248312PMFPPAPIPclaimsSummary.pdf