The number of people out of work due to ill health is growing by 300,000 a year, according to fresh analysis by a leading health thinktank.

People of working age who quit their job due to ill health were also three times less likely to return to employment than those in good health, adding to the number of people claiming disability benefits, the Health Foundation said.

Official data has dashed hopes that the effects of the pandemic would fade and the labour market would return to the situation seen before the pandemic.

The foundation said that, in addition to 4 million working-age people out of work with ill health, there were now 3.9 million people with work-limiting health conditions in employment – an increase of 1.5 million since 2013.

Indicating that the UK has seen a significant increase in the number of working-age people with disabilities that affect how they do their job, the foundation’s report showed that these workers were three times more likely to leave the workforce than those in good health.

While unemployment has increased only slightly since the onset of high inflation and the cost of living crisis in 2021, the number of people suffering mental and physical health issues has soared.

Reports from the Bank of England have highlighted how a lack of workers in key industries has forced employers to pay higher wages, preventing prices from stabilising and having knock-on effects on the economy.

Bank officials kept interest rates at 5% at their last meeting, saying they wanted to see more data indicating a return to previous levels of participation in the labour market, easing price pressures, before they cut the cost of borrowing.

The foundation said the report’s findings were part of an interim study by the Commission for Healthier Working Lives, to examine the growing challenges of working-age ill health.

Drawing on insights from employers, experts and the public, the report argues that the government needs to adopt new measures to support people with health conditions and help them back to work when possible.

The report said that support for workers with health conditions “often comes too late or is absent”.

It said: “Fewer than half of UK workers have access to occupational health services, the fit note system is ineffective and statutory sick pay is less generous than in other countries.”

“While many employers want to help, they often lack the capacity or knowledge, especially smaller businesses,” it said.

Sacha Romanovitch, chair of the Commission for Healthier Working Lives, said ministers needed to develop a strategy that supports a healthier workforce.

In the run-up to this month’s budget, and an employment white paper expected in the autumn, Romanovitch said the government needed to clear the backlog of “Access to Work” claims “so that people with disabilities and health conditions receive the support they are entitled to without delay”.

She added that there also needed to be a review of working practices in the public sector where rates of work-related ill health have soared.

“The evidence in this report shows that, despite common misconceptions, many people with long-term health conditions are eager to work and can contribute meaningfully to the economy, yet often lack the support and flexibility they need,” she said.