1. The increasing prevalence of disability

The proportion of the UK population reporting a disability has risen over the last decade. In 2010/11, the Family Resources Survey (FRS) estimated that 19% of the total population had a disability. By 2020/21, this figure was estimated to be 22%, equivalent to 14.6 million people.

Strong growth in the reporting of mental health conditions underlies the increasing prevalence of disability. In 2020/21, the FRS reported that 29% of disabled people experienced a mental health-related illness, up from 16% in 2012/13. And as noted by the Institute for Fiscal Studies (IFS), four-fifths of the rise in disability benefit recipients over the past two decades is accounted for by those with psychiatric conditions.

Nevertheless, physical impairments remain the most common form of disability, with 46% of disabled people—6.8 million people—with a mobility-related impairment. ‘Stamina/breathing/fatigue’ and dexterity-related impairments are also significant contributors, with 33% and 23% of disabled people being affected by these conditions respectively.

2. Economic impact

As explained by the Economics Observatory, the economic impact of disability is significant and propagates through two key channels.

Firstly, disabled people are “excluded from full economic participation”, with disabled people much less likely to be employed than the wider population. As reported by the Office for National Statistics (ONS), the employment rate for disabled people is 54%, compared to 82% for non-disabled people. Furthermore, disabled people that are employed are typically paid less. The ‘disability pay gap’—the gap between median pay for disabled employees and their non-disabled counterparts—was 13.8% in 2021, meaning that disabled people earn almost £2 per hour less on average.

Secondly, in addition to earning less, disabled people face ‘extra costs’ in their day-to-day lives to mitigate the impact of their disability. This often takes the form of significant bills for assistive equipment, care and therapies. Disabled people and their households also tend to spend more on essential goods and services, such as heating, food and travel. These extra costs associated with disability vary depending on the type of impairment. However, analysis by the disability equality charity Scope estimated that the extra costs faced by disabled people average £583 a month, with one in five disabled people facing extra costs of more than £1,000 a month.

In recognition of these increased costs, the government provides disability-related financial support through benefits, tax credits, payments, grants and concessions. As of November 2021, there were 5.7 million people claiming an ‘extra cost’ disability benefit.

However, even taking this support into account, people on disability benefits are still disproportionately likely to be in relative income poverty. The IFS said that, in 2019/20, 29% of people on disability benefits suffered from relative income poverty, relative to 20% for working-age adults in general. Moreover, the IFS suggests that these figures understate the rate of poverty among disabled people, given that the extra income received through disability benefits—which nominally boosts the income of disabled people—is in practice absorbed by ‘extra costs’, rather than acting as a material boost to disposable income.

3. The rising cost of living

The economic challenges outlined above—comparatively low incomes, combined with significant ‘extra costs’—leave disabled individuals and households particularly vulnerable to the rising cost of living. They have a much smaller ‘buffer’ to absorb any unexpected increase in prices of goods and services.

This increased financial vulnerability is borne out by data from a recent cost of living survey by the ONS, which outlines how disabled adults are comparatively more likely to be falling behind on household bills. This was based on a survey of households in June to September 2022. According to the survey, 55% of disabled adults were finding it difficult to afford their energy bills, with 7% reporting being behind on payments, compared to 40% and 4% for non-disabled people respectively. There was a similar picture for rent and mortgage payments, where 36% of disabled adults were finding it difficult to afford their payments and 4% were behind on payments, compared to 27% and 2% for non-disabled adults respectively.

The financial challenges faced by disabled households due to the rise in the cost of living are particularly acute as two of the key commodities which have been driving the increase in inflation—energy and food—make up a disproportionate share of the disabled household consumption.

With respect to energy, disabled people with limited mobility often require greater levels of household heating to stay warm. This problem is particularly difficult for people living with cancer, where warmer homes are required to help cope with the side effects of treatments. Disabled people who rely on assistive technologies also use comparatively more electricity. Analysis from Scope in 2018—before the recent spike in energy costs—suggested that 4.1 million disabled households spent over £1,500 a year on energy, compared to the UK average household spend of £1,200. Of these, 790,000 spent over £2,500 a year, over double the average household spend.

Disabled households also spend a greater proportion of their income on food. Depending on the nature of their disability, some disabled people have difficulties preparing food, leading to increased reliance on convenience food, which is comparatively more expensive than preparing meals from raw ingredients. Condition-specific specialist diets are also more costly. ONS data suggests that spending on food and non-alcoholic beverages averages 14% of costs for disabled households, compared to 11% for non-disabled households.

The challenge of food affordability is reflected in disabled people’s disproportionate reliance on food banks. The Trussell Trust—a food bank network—claims that disabled people are “hugely over-represented” in food poverty demographics, accounting for over half of food bank users.

4. Policy response

In recognition of the impact of the rising cost of living on disabled people and their households, the government announced a £150 ‘disability cost of living payment’ on 26 May 2022, as part of a broader cost of living support package. Recipients of certain non-means-tested disability benefits qualify for the payment, which will be made automatically. The payments started being made from 20 September 2022 and the government estimates that they will be received by around six million people. The government has noted that disabled households will also benefit from broader cost of living support measures. For example, through the energy price guarantee, which limits typical household energy bills to £2,500 over the winter, as well as cost of living payments of £650, which will automatically be paid to disabled people who are also receiving certain means-tested benefits.

In response to the government’s plans, Scope called for greater levels of targeted government support for disabled individuals, suggesting that the £150 disability cost of living payment should be doubled and that a social tariff should be introduced for disabled people with the highest energy usage and the lowest incomes. Disability Rights UK argued that benefits should receive an “emergency uprating” to be in line with the Bank of England’s inflation forecast of 13% and that there needs to be an urgent review of the adequacy of “extra-costs benefits” for covering additional costs of living with a disability.

5. Autumn statement

At the autumn statement on 17 November 2022, Chancellor Jeremy Hunt announced further support, including an additional disability cost of living payment of £150 and an additional cost of living payment of £900 for those on means-tested benefits. He also committed to uprating benefits in line with inflation. However, these payments and the benefit uprating will take place in the 2023/24 financial year.

In response to the statement, Disability Rights UK suggested that the lack of “meaningful increases” in disability benefits over recent years means that the extra £150 payment does not “touch the sides”. Scope was pleased that the government committed to uprating benefits in line with inflation but said that the further additional payments scheduled for next year did not arrive soon enough. It also stated that a further long-term solution was required to address the “crisis” of costs now faced by many disabled households.

Cover image by Freepik.