Researchers from the University of Sydney and University of Canberra teamed up to quantify the cost of lost savings and wealth to Australians who retire early because of depression or other mental illness. Their findings are published in the February issue of the British Journal of Psychiatry.
The study was based on a survey of 8,864 people aged between 45 and 64 and an innovative economic model called Health&WealthMOD which together provided information about their employment, income, and wealth accumulated in savings, property and other financial investments. Of these people, 43 were not working because of depression, and 56 were not working because of other mental illnesses.
The mean total wealth accumulated by people who were employed full time and did not have any mental illness or other chronic health condition was AUS$398,098 (£218,954), while those who worked part time had accumulated a mean wealth of AUS$360,071 (£198,039).
In contrast, those who were not in the labour force due to depression had accumulated an average AUS$236,727 (£133,200), while those not in the labour force because of other mental illness had accumulated just AUS$148,771 (£81,824) on average.
Lead researcher Professor Deborah Schofield said: “Our study shows that people who retire early as a result of mental ill health not only have a loss of immediate income from employment, but also have a very low value of savings. We found that people who are not working because of depression or other mental illness have 78% and 93% less wealth accumulated respectively, compared with people of the same age, gender and education who are working and who have no mental health or other chronic health problems.
“We also found that people who are out of work because of depression or other mental illness are more likely to have the wealth they do have in cash, rather than in other higher-growth assets such as property or financial investments.
“This lower accumulated wealth is likely to result in lower living standards for these people, and the state may be required to provide financial support – a hefty financial burden. We believe that some of this financial burden could be avoided by investing more money in interventions to prevent the occurrence of mental illness in the first place.”
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Schofield DJ, Shrestha RN, Percival R, Kelly SJ, Passey ME and Callander EJ. Quantifying the effect of early retirement on the wealth of individuals with depression or other mental illness. British Journal of Psychiatry 2011; 198: 123-128