UK Government to Tighten Disability Benefits as Mental Health Fuels Workforce Exodus

Planned reforms target Personal Independence Payments while businesses and policymakers struggle with rising economic inactivity, particularly among Generation Z.

Mental health challenges are a key driver of economic inactivity, with 37% of Generation Z workers considering leaving their jobs in the past year.
The UK is the only G7 country with fewer people in work now than before the pandemic, with economic inactivity peaking at 22.2% in 2024.
The government is set to announce stricter eligibility criteria for Personal Independence Payments, aiming to reduce rising disability claims tied to mental health conditions.
Businesses report significant financial impacts from workforce inactivity, with 54% reconsidering benefits and training to retain employees.
A PwC survey found that 43% of economically inactive individuals are interested in returning to work but face barriers such as mental health struggles and low self-esteem.