Mental illness costs England £300bn a year, study shows

Mental illness costs England £300bn a year, equivalent to nearly double its NHS budget, according to research.

Researchers for the Centre for Mental Health thinktank analysed the economic, health and care impact of mental ill health, as well as human costs from reduced quality of life and wellbeing.

The report, commissioned by the NHS Confederation’s mental health network, calculated that in 2022, mental illness cost £130bn in human costs, £110bn in economic costs and £60bn in health and care costs.

The £300bn cost in 2022 equates to nearly double the NHS’s entire £153bn budget in England in the same year and is a “comparable impact, economically, to having a pandemic every year”, the report concludes.

The greatest financial impact, £175bn, falls on people living with mental health difficulties and their families, while the public sector incurs £25bn and business £101bn.

Related: NHS mental health care in crisis: 'There is no hope for people like me'

For the first time, the report also assessed some wider financial impacts of mental illness such as presenteeism, staff turnover and lost tax revenues from economic inactivity.

The authors calculate that presenteeism – where someone is less productive at work due to impaired cognitive function and emotional distress caused by their mental ill health – cost £41.8bn, while staff turnover due to mental illness cost £43.1bn and lost tax revenues cost £5.7bn.

The report concludes that even the £300bn is likely to be a significant underestimate. If other impacts of mental ill health were included, such as the £10bn to £16bn cost of physical and mental health comorbidities and the £2.1bn cost of mental ill health in prisons, the total would be even higher.

The figures underline the scale of the mental health crisis. Referrals to NHS mental health services in England rose 44% between 2016-17 and from 4.4m to 6.4m in 2021-22, while the number of people in contact with mental health services rose from 3.6 million to 4.5 million during that same period, the National Audit Office calculated.

According to the Department of Health and Social Care, mental health accounts for just 9% of NHS spending despite taking up 23% of the “burden of disease”.

In 2002 the estimated cost of mental ill health in England was £76.3bn. Further analysis of the figures suggests that even accounting for inflation and stripping out any costs in the 2022 figures not included in the 2002 figure, there has been a 40% increase in the cost of mental illness in England in the past two decades.

Andy Bell, the chief executive of the Centre for Mental Health, said ministers “cannot afford to ignore the devastating impact of mental ill health”, adding: “A pound sign can never fully reflect the suffering caused by mental ill health.

“Rising inequality, austerity and cuts to early support have contributed to a nation with overall poorer mental health, and have led to more people reaching crisis point before they get support.”

The NHS Confederation’s mental health network chief executive, Sean Duggan, reiterated the call for action from ministers, saying: “The false economy of failing to invest in mental health is making the country poorer and causing unspoken anguish to so many people and their loved ones. It is vital that we now invest in effective interventions that bring us closer to a mentally healthier nation for all.”

Wes Streeting, the shadow health secretary, said: “The failure of the Conservatives to support people out of lockdown, in particular young people who have felt the effects worse than most, has stored up huge problems for our society, economy and the public finances.”

Brian Dow, the deputy chief executive of Rethink Mental Illness, called mental ill health rates “one of the greatest challenges of the 21st century”.

The report’s release came as a coalition of leading health organisations signed a joint letter urging Victoria Atkins, the health secretary, to take “urgent steps” to protect the mental health and wellbeing of health and care staff as specialist hubs “continue to close”.

Ringfenced funding for NHS mental health and wellbeing hubs was cut a year ago, the organisations said, and as a result, staff in need of support face a “postcode lottery” of care. Of the original 40 hubs, 18 have closed since March 2023, they said.

A government spokesperson said: “We’ve increased spending on mental health by £4.7bn since 2018/19, to support even more people.

“We are also continuing to roll out mental health support teams in schools and colleges, investing £8m in 24 early support hubs and expanding talking therapies services so people get help early on with their mental health.”