Poor health costs Welsh economy nearly £20bn a year, report finds

Ill-health and disability that prevent people from working are costing Wales an estimated £19.4 billion a year, according to new analysis from Public Health Wales.

The figure includes lost productivity from sickness absence and long-term economic inactivity, as well as wider costs such as benefits payments, reduced tax income and additional pressure on the NHS.

The largest share of the cost comes from people of working age who are unable to work due to ill-health, estimated at £8.2 billion annually. Sickness absence accounts for a further £2.9 billion, while informal caregiving linked to illness adds £2.3 billion.

Public Health Wales also estimates that health-related worklessness leads to £3.4 billion in lost tax and National Insurance revenue, alongside £2.4 billion in benefits payments. Additional NHS costs linked to economic inactivity are put at £155.6 million.

The findings highlight a growing link between health and employment in Wales, with officials pointing to rising numbers of people out of work due to illness, particularly mental health conditions among younger people and musculoskeletal problems in older age groups.

Ciarán Humphreys, a consultant in wider determinants of health at Public Health Wales, said the figures reflect broader structural challenges.

“In Wales, many people spend more of their lives in poor health because the building blocks we need to keep us healthy, such as decent housing or fair work, can be weak or absent,” he said.

He added that early and tailored support can help people with health conditions enter and remain in work, with wider benefits for both individuals and the economy.

“Investing in prevention and supporting participation in fair work is key,” he said.

Public Health Wales argues that employment can play an important role in improving health outcomes, providing financial security as well as social and psychological benefits.

The report comes amid wider concerns about economic inactivity across the UK, with health-related worklessness identified as a major factor in labour market trends.

Alongside the findings, officials highlighted the role of the Healthy Working Wales programme, which provides support to employers to improve workplace health and wellbeing.

The scheme offers advice on creating healthier working environments, managing sickness absence and supporting employees with long-term conditions.

Measurable benefits

Consultant in public health Oliver Williams said employers who invest in staff wellbeing can see measurable benefits.

“For every £1 spent on supporting mental health and wellbeing, employers can see returns through increased productivity,” he said.

The report suggests that improving health and access to work could have significant economic benefits for Wales, as well as reducing pressure on public services.

It also points to the need for coordinated action across areas such as housing, employment and healthcare to address the underlying causes of ill-health.