27 January 2025
Disability benefits are a lifeline for many disabled people in the UK. They provide vital financial support to cover the extra living costs that arise from their long-term conditions, from daily living to mobility. Having this support is particularly important as disabled people in the UK tend to have lower incomes and lower wellbeing than average. In other words, not only are disabled people facing more financial difficulty overall, but they report a lower quality of life.
Existing evidence suggests a positive relationship between income and wellbeing. This implies that any change in income is likely to have an impact on an individual’s overall wellbeing. Consequently, it is reasonable to expect that any increase in income would translate into a wellbeing gain. However, when thinking about disability benefits, a relevant question arises: do recipients secure a wellbeing gain valued greater than a simple cash transfer? We test this question by tracking changes in wellbeing among two groups of disabled people: those receiving disability benefits and those who may be eligible but are not receiving them. It is expected that disability benefit recipients would have a higher wellbeing improvement than their peers – but is the equivalent value of that boost larger or smaller than the extra cash reaching their pockets?
By tracking the wellbeing of disability benefits recipients and those who are not receiving disability benefits but may be eligible over time, the findings of this report suggest that receiving disability benefits significantly enhances life satisfaction of recipients, potentially reducing their anxiety levels and improving their wellbeing overall. The observed increase in life satisfaction among disability benefit recipients suggests that these benefits mean more than a simple cash transfer to those who receive them. This boost in wellbeing can be expressed in economic terms and translates to an average annual wellbeing improvement valued at £12,300 per person, and a potential £42 billion in annual economic benefits if support were maintained for the 3.5 million disabled people currently getting the support. Crucially, when compared with the annual costs of providing this support, estimated at £28 billion a year for this group, the economic benefits seem to outweigh the costs.
