The welfare system is damaging the health of the poor and needs to be overhauled in the wake of the Covid pandemic, Britain’s leading expert on health inequalities has warned.

Sir Michael Marmot said increasing out-of-work benefits and support for low-paid workers as the country emerged from the pandemic could have a big impact in curbing a mental health crisis and even save lives.

Marmot, who chaired a seminal government review on health inequality in 2010 and warned last year that life expectancy had stalled for the first time in more than 100 years in England, said in an interview with the Observer that ministers should not “fiddle around the edges”, and instead should drastically reform the “uncaring” system in place.

“During the pandemic, we have seen that poor people got poorer,” he said. “We know that food insecurity went up. The likelihood of being in a shut-down sector increased the lower the income. So you’re either in a sector that was shut down, if you were low income, or you had to go out to work in an unsafe sector, or frontline occupation. Where we were in February 2020 was undesirable – and what happened with a pandemic is it made those inequalities worse.

“I have seen evidence that for some people in receipt of universal credit, there are mental health consequences. It is a brutalising system. Everyone should have at least the minimum income necessary for a healthy life. That means, ideally, all people of working age should be in work. That’s the desirable state.

“And in work, they should be paid a living wage. If they can’t work, for whatever reason, then the welfare system should be sufficiently generous for their health not to be damaged by that experience. We know what needs to be done. Let’s do it.”

His intervention comes as one of the government’s own advisers warned that ministers will face a massive political backlash when a £20-per-week boost to universal credit is cut later this year. Charlotte Pickles, a member of the government’s Social Security Advisory Committee and an architect of universal credit, said the current system simply was not generous enough.

“If you think about the red wall seats, those parts of the country that the Conservatives won back in December 2019, there’s going to be a lot of people in those areas that will be benefiting from the £20,” she told the Institute for Fiscal Studies podcast. “This £20 uplift, I think, is going to have to be extended further. Not just because the political fallout of it will be massive, but also because the benefits are too low at the moment.”

There is mounting evidence that the pandemic is leaving behind increased poverty, hitting the poorest and those in low-paid work. The number of British households plunged into destitution more than doubled last year, according to the National Institute of Economic and Social Research. Meanwhile, there is also evidence that Covid infection rates in some cities have been highest among the working poor. A Sheffield council report suggested people in low-paid jobs who could not afford to self-isolate had been hit hardest

Marmot said that studies had shown that more generous labour market support could even have an impact on suicide rates during economic downturns, suggesting that a rethink “could prevent a great deal of suffering”.

“The evidence has shown that the generosity of active labour market programmes, both unemployment insurance and efforts to get people back into work, breaks the link between the rise in unemployment and the rise in suicide,” he said.

“You can actually prevent it by active government programmes. And the more generous those programmes, the weaker the link between the rise in unemployment and the rise in suicide. Governments have it in their power to prevent people from taking their own lives. I think it’s reasonable to see suicide as the tip of the iceberg, that if government policy can prevent suicide, it’s probably also able to prevent mental illness.”

A government spokesperson said: “We are committed to supporting the lowest-paid families through the pandemic and beyond to ensure that nobody is left behind. That’s why we’ve targeted our support to those most in need by raising the living wage, spending hundreds of billions to safeguard jobs, boosting welfare support and local authority funding by billions and introducing the £229m Covid Winter Grant Scheme to help children and families stay warm and well fed. We have also provided £32m for food distribution charities£750m to tackle homelessness and rough sleeping next year.”