Helen Undy, Chief Executive, Money and Mental Health

How to close the mental health income gap

3 February 2021

People with mental health problems live on an income that is, on average, £8,400 lower than those without mental health problems every single year. 

That’s the stark headline from our Mental Health and Income Commission, which publishes its final report today. That persistent low income drives people into problem debt, leaves families going without essentials, limits our potential at work and further exacerbates poor mental health. It’s not a new problem, but it’s one that has been exposed more than ever in the face of the pandemic, and looks set to get even worse without urgent action.

Understanding the drivers of this lower income is an ambitious task, incorporating everything from benefits policy to employment discrimination, mentoring and progression at work to sick pay and flexible working. To do justice to this complex policy area, we decided to ask for the help of some experts from the worlds of business, politics, trade unions and charities — as well as those with personal experience of mental health problems — and the Mental Health Income Commission was born.

The inequalities exposed by Covid-19

While the case for the Commission was already apparent, the Covid-19 pandemic has both laid bare existing inequalities in a way we’ve not seen before, and has increased the number of people experiencing both money and mental health problems. From the beginning the Commissioners were clear — the resulting reports needed to address both the urgent response to the pandemic, and the wider systemic change that is needed. If we are to ‘build back better’ we need to ensure that people with mental health problems are not left behind.

For all the challenges, the pandemic response brings opportunities too, and the Commissioners were keen to make the most of these. As well as unprecedented action to support household budgets, there is an increased acknowledgement from government of the connection between money and mental health and the sheer number of people affected. This pandemic is a crisis on a scale that most of us have never seen in our lifetimes. It has changed what we thought was normal, and what we thought was possible, opening the door to a policy response that we could not have previously imagined.

The work of the Commission

The first two reports for the Commission measured the mental health income gap, identified its drivers and explored the impact that the Covid-19 pandemic has had. We drew upon new analysis of national datasets, polling and the contributions of our Research Community, a group of 5,000 people with lived experience of mental health problems. This final report focuses on solutions. It makes a wide ranging set of recommendations to government and employers, not just to close the mental health income gap, but to prevent it widening even further in the aftermath of the pandemic. These include:

  • Introducing a right to flexible working for all employees during the pandemic. Currently, employees have the right to request flexible working, but this can be easily rejected by employers. Requiring employers to offer flexible working practices during the pandemic would help more people with poor mental health to continue to work, and would increase income security. 
  • Increasing levels of Statutory Sick Pay, and ensure more workers can access it. People with mental health problems are more likely to need time off work due to illness. But many struggle to get by with the current rate of SSP (£95.85 per week), while workers who earn less than £120 per week are ineligible for it. Increasing the generosity of SSP — and making it a basic employment right for all workers — would help prevent existing income inequalities from growing during the pandemic. 
  • Requiring employers to report on the mental health pay gap and on flexible working requests. The government should make it mandatory for companies with over 250 staff to report on the pay gap between employees with mental health problems and others, and the number of flexible working requests denied and granted. This would help expose inequalities in the workplace and discriminatory work practices.
  • Ensuring benefits provide a proper safety net for people with mental health problems. Make the uplift to Universal Credit permanent, extend it to legacy benefits, and suspend benefits conditionality for people who are out of work as a result of their mental health.

Let’s not go back to normal

The pandemic has forced us to change the way we work, creating flexible working opportunities where previously these had been denied or considered impractical. We all want the pandemic behind us, to be able to live without constant fear. But our research has found that, for millions of people with mental health problems, the fear of going back to business-as-usual — and losing this flexibility — is very real.

I certainly find that there are sometimes days where I feel quite used to our ‘new normal’, and then there are the days when the enormity of the change to our lives is overwhelming. Realistically, there is no going ‘back to normal’ now, the imprint of this pandemic will be embedded in our national psyche, in our policies, our behaviour, our relationships for generations to come. What remains to be seen is what those changes will be. Now is the moment to take action to ensure that the legacy of this pandemic is not an uncontrolled fall-out, but is one that we create and build, one that closes rather than exacerbating the mental health income gap.