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Most important is the sharp increase in the number of people reporting as chronically ill. This covers a range of issues, including prolonged Covid and the backlog of NHS care built up during the pandemic. It also includes problems such as stress at work and difficulties with menopause.
There is no easy answer here. It’s certainly not just a question of resources: the NHS has more money and more staff than before Covid, and yet it’s treating fewer patients. Dare I say it, the organization itself may be part of the problem.
The second biggest contributor to rising inactivity is less worrisome – a sharp increase in the number of mainly young people choosing to be students rather than work during the pandemic. This should at least correct itself as they complete their courses and rejoin the labor market, hopefully with more skills than before.
It’s also important not to lose sight of the bigger picture. An important trend is the natural aging of the population. This is partially adjusted for by looking only at specific age groups – such as between 50 and 64 – because the average age in each group will increase.
Another is that many people have simply decided that it is no longer worth working more, as high inflation and an increasing tax burden have reduced take-home pay.
Of course, not everyone has this choice. Some people actually have to work more to cover their rising bills. But there are others for whom work will no longer pay, including those nearing normal retirement, single parents worried about rising childcare costs and those who may lose benefits if they work longer hours.
The obvious solution is to make sure the work actually pays. This is partly about ensuring that tax and benefit systems do not discourage work.
A good example is that people have a perverse incentive to retire early to avoid paying more tax on their pension pot. The case for an increase in lifetime allowance is strong. I would go further and revisit the entire tax treatment of pensions.
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