Sarah TaylorEconomic inactivity driven by long-term illness and disability is one of the UK’s most urgent workforce challenges. Currently, 2.8 million people are inactive due to health conditions, and without targeted intervention, another 600,000 could leave the workforce by 2030.
The Government’s recent Keep Britain Working Review looks at why this is happening and what needs to happen to turn the trend around. Its central message is that employers, employees and the NHS all have a part to play in earlier intervention and better support. The real question is what that means for employers in practical terms.
The Keep Britain Working Review: what it means in practice
Ill-health-related inactivity is now costing the state an estimated £212bn a year, with around £2bn of that falling directly on the NHS. With numbers like that, it’s no surprise the Review is pushing for support to start much earlier and for employers to take a more active role.
The practical takeaway for employers is that they will be expected to step in earlier and give employees a more reliable route to support. Crucially, this is not only about helping people once they become unwell. It’s about putting measures in place that reduce the likelihood of ill health developing in the first place. That includes identifying emerging health risks, building preventative programmes, and keeping employees connected to work while they manage long term conditions.
The Government plans to test this approach through a three-year Vanguard Phase, where employers and local health teams will trial different versions of the model and provide feedback on what works. But with pressures growing now, employers don’t have to sit back and wait. Organisations that move towards a preventative approach will be in a far stronger position when it comes to retention, absence and long-term workforce health.
How employer-led healthcare drives workforce participation
If employers are being asked to act earlier, the obvious question is what that looks like in practice. Much of it comes down to creating workplace environments and health support systems that prevent issues from escalating, rather than responding once people become unwell. Employees dealing with ongoing health concerns often end up off work for longer than necessary, so a preventative, workplace-led model plays a central role in helping people remain well enough to stay in their roles.
More people are managing ongoing or multiple conditions, and they need help that lasts beyond a single appointment or referral. Our data shows this clearly, with the demand for chronic-condition pathways having risen by 92% over the past year. Traditional benefits often focus on reacting to issues after they arise, rather than preventing them.
At the same time, an ageing workforce with many employees now working into their late sixties is driving a rise in long-term conditions that require sustained, coordinated support. For modern workforces managing ongoing symptoms, fluctuating long-term conditions and the pressures associated with later-life working, a reactive model simply isn’t enough.
For employers, the next step is understanding what their teams need. While different roles bring their own pressures, one of the most widespread challenges across all sectors is the impact of sedentary working patterns, particularly on MSK health. Whatever the mix, the focus should be on building support that prevents issues arising, tackles risks early, and helps employees maintain day-to-day health, rather than only stepping in once problems become acute. This preventative approach should also deliver more value for employers; with preventative care often being at a lower cost than treatments.
A move towards healthcare trusts
The Review estimates that employers may need to invest around £6bn a year across the economy to meet the ambition of earlier intervention and better workplace health support. Rising PMI premiums are adding to this pressure, pushing some organisations to reassess how they fund employee healthcare. Lord Darzi’s 2024 review highlighted that a more preventative approach to healthcare can reduce demand for higher-cost treatment later on, meaning some of that investment could deliver long-term savings.
Healthcare trusts can support that preventative approach by giving employers greater influence over how healthcare budgets are used, allowing more investment in early intervention rather than reactive treatment. Benefits can be tailored to the workforce, spend can be directed to areas that deliver the most value, and any surplus stays in the trust to support future claims. That visibility and flexibility mean decisions are based on what will achieve the best outcome for employees, not just whether treatment meets policy terms, helping reduce waste and improve recovery.
Alongside these advantages, trusts also benefit from not being subject to the 12% Insurance Premium Tax. For employers with significant healthcare spend, this ensures more of their budget goes directly into treatment and support.
Looking ahead
The Review makes the case for a more proactive approach to workplace health but turning that ambition into reality will fall largely to employers. Long-term sickness is already affecting retention and productivity, and employers need support structures that can respond today, not in three years’ time.
The key test is whether current healthcare investment is truly delivering value, and whether it is reducing risk and preventing issues earlier, rather than absorbing cost once employees become unwell. Strengthening early-stage healthcare and considering more adaptable models, including trusts, will help organisations meet the needs of their workforce and stay ahead of the challenges the Review highlights.
Sarah Taylor is director of corporate proposition at Healix Health
