Better mental health could encourage economic prosperity in England’s underprivileged regions

Addressing the mental health of communities across England could lead to a rise in economic prosperity, according to a new paper published today 24th June 2026.

Researchers conducted a study of nearly 7,000 small areas across England from 2011 to 2019, and found a “positive association” between improving mental health and increasing household income.

These findings add weight to the argument that investing in mental health brings economic benefits to individuals and their communities. This is particularly relevant for areas in the North East and North West of England, which rank among the lowest regions in the country for both mental health and household income.

The new research was funded and led by academics from The Productivity Institute (TPI), the University of Manchester, Health Equity North (HEN), Newcastle University, and the National Institute for Health and Care Research (NIHR) Applied Research Collaboration Greater Manchester (ARC-GM).

They examined how Gross Disposable Household Income (GDHI) was associated with variations in the Small Area Mental Health Index (SAMHI), an index which combines local data on mental health-related factors such as hospital visits, antidepressant prescription, prevalence of depression and uptake of benefits relating to mental illness.

The study found that:

•    Improving mental health by one point on this index is linked to a 1.9% rise in gross disposable household income a year later

•    The association between better mental health and improved economic performance is strongest in the North East, suggesting the region has the most to gain economically from boosting mental health provision. Household incomes could increase by 3.2% in the North East and 2.4% in the North West, higher than the national average and considerably higher than in London.

•    In the North East, this equates to around an extra £735 per person per year, an extra £551 per person per year in the North West, and an extra £482 per person per year in Yorkshire and the Humber.

•    The mean gross disposable household income per capita over the 2011-2019 period was £22,959 across England. However, it was significant higher in London (£29,346) and the South East (£25,300) and significantly lower in the North East (£19,353), Yorkshire and the Humber (£19,813) and the North West (£20,561) 

•    The North East consistently registered the worst levels of mental health between 2011 and 2019, followed by the North West. London consistently ranked highest. However, mental health has declined in all regions during this period.

You can read the full study here.

The results echo previous research by Health Equity North into the link between mental health and economic growth. The Health for Wealth 2025 report highlighted mental health as a key factor in “tackling economic activity and driving economic growth”.

The UK Government has identified mental health care as a key priority in its 10 Year Health Plan, with NHS mental health spending forecast to reach a record £16.1 billion in 2026 [1]. Earlier this month, frontline workers, clinicians and mental health experts were invited to share their views on how to re-shape the country’s mental health strategy and improve care for children and adults.

Demand for mental health services is rising rapidly across England, particularly among children and young people. As many as one in five people in the country are now affected by a common mental health condition [2].

Doriane Mignon, lead author and Research Fellow in Population Health, Health Services Research and Primary Care at the University of Manchester, said: “While we have not established a definitive causal link, there is a clear positive association between improvements in population mental health and the subsequent household income per capita. This is particularly true in regions such as the North East and North West, which have traditionally suffered from regional inequalities in both income and mental health.

“As the British Government explores approaches that will improve well-being, productivity and growth, it is important that it considers the potential impact of strategic investment in mental health support on the lives of its citizens and communities.”

Dr Luke Munford, Academic Co-Director of Health Equity North, NIHR ARC-GM Co-director and Senior Lecturer in Health Economics, The University of Manchester, said: “With as many as one in five people experiencing some form of common mental health condition, the case for improving mental health services across the country is compelling. Studies such as this one merely add further weight to the argument.

“As this study indicates, addressing mental health issues may lead to better outcomes for households. Furthermore, the greatest effects could be felt in northern regions, which have traditionally been most affected by health and economic inequalities.

“Many people still struggle to access the support they need, especially in areas that are traditionally deprived or under-serviced. Taking proactive measures today can change the path of someone’s life, and help to build more healthy and hopeful communities.”

Professor Clare Bambra, Academic Co-Director of Health Equity North and Professor of Public Health at Newcastle University, said: “Communities across the North face a range of challenges which affect their mental and physical health, and ultimately their life expectancy. It is sadly not news to us that the North East and North West struggles with poor mental health and low household incomes compared to the rest of the country. 

“Studies such as these are a crucial reminder of the work that is still ahead, but they also offer hope. This report indicates that investing in better mental health in our communities helps people to be more productive and prosperous. These findings are backed up by our 2025 Health for Wealth study, which highlighted the impact of even a small improvement in mental health on individuals, services and communities as a whole.

“We welcome the Government’s focus on mental health services as part of its 10 Year Health Plan. However, to truly unlock the potential of the North, targeted and sustained investment is required to reverse widening regional inequalities and deliver better quality of life for all.”

The full study – entitled “Is there an association between mental health and economic prosperity? A longitudinal ecological study in England, 2011-2019” – is available via the link here: https://doi.org/10.1136/bmjopen-2025-113549

References:

1    https://www.gov.uk/government/news/government-to-transform-mental-health-care-with-new-strategy 

2    https://digital.nhs.uk/data-and-information/publications/statistical/adult-psychiatric-morbidity-survey/survey-of-mental-health-and-wellbeing-england-2023-24/common-mental-health-conditions