A 'Mental Health Income Gap' Could Cost You £8,400 in Earnings

New research shows that the typical income for people with mental health issues is far less than the rest of the UK population.
March 3, 2021, 1:02pm
​A man wearing a hardhat uses a laptop. Photo: Thomas Peter / Reuters
Photo: Thomas Peter / Reuters

“I couldn’t function, really,” says Becky, 29. “I was incredibly depressed. I wasn’t really sleeping at all. I couldn’t really do basic day-to-day activities without support. But I was going into work and doing a full day, and nobody would have known any different.”

This was back when Becky was 25, working as a consultant at a large firm. She was on track to be promoted to manager, but her mental health struggles were taking a huge toll on her life.  

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She asked her career counsellor whether she should tell her bosses what she was going through. Becky says they told her: “You’re on track to be promoted, you’re going to make manager early, but if you start talking about your mental health, you will get sidelined.”

Becky, who requested that her name be changed to protect her anonymity, says: “The minute you have anything less than an absolutely perfect story to tell in performance conversations, you don’t make the cut.” She also emphasises the significant pay increase that came with the promotion, describing it as “the difference between buying a house and renting”. 

A February report from the Mental Health Income Commission (MHIC), led by the Money and Mental Health Policy Institute, notes the severity of what it has termed the “mental health income gap”. The report notes that typical income for people with mental health struggles is £8,400 less than for the rest of the population (equivalent to £18,200 vs £26,600), and details the economic barriers presented by both the labour market and social security to those with mental health issues.

“We found three key drivers,” says Conor D’Arcy, head of research and policy at the Money and Mental Health Policy Institute, an independent charity and think tank. “Employment: you’re less likely to be in work; wages: when you’re in work, the types of roles that are available for part-time work [which often offers more time to care for mental health] are lower paid in general; and the benefits system, which doesn’t really offer a safety net for people who aren’t able to work.” 

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Becky stayed quiet. She took sick days for her mental health, including times when she couldn’t get out of bed due to her depression, and said that it was a physical sickness. And she was awarded the promotion. She’s certain that this wouldn’t have been the case if she’d been open about how she was feeling. “I absolutely knew that I did not have that option available to me,” she says. 

The mental health income gap is far-reaching, and it significantly affects millennial and Gen Z workers. “We didn’t do any specific age cuts, but more broadly, the impact of COVID-19 has been worse on young people, [in terms of their] employment and wages,” says D’Arcy. “A lot of the industries that younger people tend to work in, like hospitality, have been really heavily affected.”

Hannah is 21, and has been struggling with depression, anxiety and PTSD for over ten years. She’s experienced the mental health income gap first-hand. “It’s definitely a ‘catch-22’ situation between finding employment that allows for a stable income, and finding employment that allows flexibility and more beneficial outcomes for my health,” she says.

Hannah, who asked to use her first name, is currently receiving Universal Credit, after acknowledging to herself that she was in “no state to start working” during a period of severe depression and stress. “I earn anywhere between £600 and £750 a month,” she says. “Four-hundred and fifty pounds of Housing Benefit towards my £490 rent, and the rest is made up by Universal Credit which is used on the outstanding rent, bills and food. Often, we may be left with £40 or less for food per month, which [means I have to] get a food parcel from the local food bank.”

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The MHIC report offers immediate and systemic suggestions for both companies and the government to adopt in tackling the mental health income gap. These include the suspension of benefit conditionality for those out of work due to mental health problems in the short term (something Rethink Mental Illness has also previously campaigned for), and a legal requirement for companies to report on pay gaps between employees with mental health difficulties and those without in the longer term. 

There are some companies, though, who are already taking steps to create a more positive work culture. Tanveer, 22, has struggled with anxiety since she was 17. “It’s constant, almost like living with fear every day,” she says. She has felt the strain on her mental health recently, particularly during lockdown, when she’s been finding it very difficult to work as normal. She was scared to mention this for fear of being labelled, or even losing her job. But in the end, she decided to take the risk. 

“I plucked up the courage and told my manager what I was going through, and I’m now on reduced hours,” Tanveer says. Her new hours have had a hugely positive impact on her mental health – although she notes the drop in income – but she maintains that there is an ongoing stigma surrounding mental health in the workplace. “It’s almost like you have to pick between a positive mental state and earning an income, which really should not have to be a decision someone faces,” she points out. 

Given the havoc that COVID-19 has wreaked on both mental health and finances, tackling the mental health income gap has arguably never been more important. Now, as we start to head back to work in a post-pandemic world, there is an opportunity for employers and the government to start addressing the gap – particularly given the flexibility that has been proved possible over the past year, and the global mental health conversations that the pandemic has initiated.

D’Arcy is keen to emphasise that, going forwards, improvement strategies don’t always need to be complicated or overly expensive. “Working from home can make a really big difference,” he says. “It lets people have their own space and time, and manage their mental health in a more balanced way. If open-plan offices can be distracting or upsetting, then noise-cancelling headphones can be a really useful tool.”

The first step, though, is a culture of openness. Becky tells me of a “constant need to present this perfection on the outside, this high performance culture, where you can’t let anything slip.” We need employers – and the government – to tackle that culture in order for the mental health income gap to close.