Early mental health support for young people could deliver £56bn boost

Investing in early mental health support for children and young people could deliver £56 billion in lifetime economic benefits while reducing pressure on schools and public services, according to a new report commissioned by The Children's Society.

The report, The Happy Childhood Dividend, by think tank PBE, argues that reversing a decade of decline in children's mental health would improve educational attainment, reduce school exclusions and lower demand for special educational needs (SEN) support, while increasing lifetime earnings.

Researchers estimate that reversing the decline in children's mental health could boost GCSE attainment by up to 1.6 grades per child, reduce the likelihood of school exclusion by up to 0.4 percentage points and reduce the need for SEN support by up to 1.1 percentage points.

Across the current school-age population, this equates to an estimated £56 billion in lifetime benefits, including £50 billion through higher earnings, £606 million through reduced demand for SEN support and £17 million in lower school exclusion costs.

The report comes as one in five children aged between eight and 16 are now estimated to have a probable mental health condition, while only 36% of children referred for NHS mental health care are seen within four weeks.

The research argues that earlier intervention, particularly through schools, could help address growing demand before problems escalate. It highlights the role of Mental Health Support Teams and Early Support Hubs, but notes that 40% of school leaders cite staff capacity as a barrier to making full use of available support.

Alongside the report, The Children's Society published additional economic analysis examining the wider benefits of investing in early support for young people's wellbeing and mental health.

It found that for every £1 invested in expanding early mental health support, society and the public purse could receive £14 in economic benefits. The charity estimates around two-thirds of young people aged 10 to 17 who needed mental health support in 2023 did not receive appropriate help, leaving around 740,000 young people beginning to struggle without support.

PBE estimates that providing appropriate early support would cost around £4.1 billion but could generate around £56 billion in total economic benefits, including £39 billion in improved wellbeing for young people and their parents, £15 billion through increased lifetime earnings, more than £1 billion from improved parental employment and productivity, and over £300 million in savings to public services.

The report concludes that intervening earlier delivers the greatest return on investment, although wider societal changes would still be needed to restore children's wellbeing to pre-pandemic levels.

Rachel Gomez, Senior Economist at PBE and co-author of the report, said: "This research makes clear that expanding access to effective mental health support is not only a matter of fairness for children, but a strategic investment in society's future. Prioritising this now means giving every child the chance to thrive, with long-term benefits for them, their families and the rest of society"

Catherine Roche, CEO of Place2Be, said schools are central to improving children's mental health but require greater investment across services.

"From our 30 years' experience of working with schools, we know that schools are vital environments and safe spaces for promoting positive mental health. Our work shows that with the right support in place, children can thrive emotionally and academically, and the benefits stay with them and pay dividends over time.

"In today's fast-paced and more complex world, the scale of need is growing and not being met. We need to see joined-up investment and implementation across health and education, working in partnership with schools and leveraging their strengths. This will enable more children to be reached earlier, with the right targeted and evidence-based support before problems escalate."

Lyndsay Harris, Director of Pastoral and Inclusion at Ark, said the findings reinforced the importance of whole-school approaches to wellbeing.

"This report from PBE really highlights the importance of positive mental health across schools as an important universal provision to build a social, emotional and future economic benefit for children and young people. Evidenced by this report, when children feel mentally well, it boosts their life chances. At Ark we prioritise mental health and wellbeing for both our staff and students, so that our schools are places where everyone feels seen and heard. This includes investing in a universal entitlement for extra-curricular and enrichment experiences, as well as ensuring every school in our network has access to in-school therapeutic provision to support a whole school approach."

Mark Russell OBE, Chief Executive of The Children's Society, said the findings demonstrated both the human and financial costs of failing to intervene earlier.

"For too long, young people have been left to navigate an increasingly changing world with a support system that hasn't kept up. These gaps in support cannot become the norm. And it doesn't make sense – neither for the young people being let down; our public purse; or the general progress of society. This issue cannot be ignored any more, not only does this support gap need to be urgently filled, it needs to come alongside wider systems change at the very core of our society."

The charity said it has presented the findings to government following a launch event in Parliament and is calling for cross-government investment in early intervention alongside wider reforms to improve children's wellbeing, including whole-school approaches to mental health and greater access to trusted adults trained to recognise and respond to emerging mental health needs.