The report, 12 minutes more, suggests employers have an important role to play in encouraging workers and reveals the country could benefit from some £7 billion of savings if people followed the Government's recommended daily amount of exercise guidelines.
The Government recommends adults should take 150 minutes of exercise a week. According to the report 70% are not meeting this target.
Active people are not only 7% less likely to be obese, but they also reduce their risk of poor mental health by 6%, the report finds.
Speaking at the launch of the report this morning in London, Grace Lordon, lecturer at LSE. said: "One of the reasons people are not active is because of time pressure, so there's a role for employers to play."
Andrew Jones, managing director of Nuffield Health, predicts two major changes to how employers deal with workers' health and wellbeing in the next five to 10 years.
He said: "We will see a growth in GP and mental health services at work, which will be linked to the fitness agenda. There's a real demand especially for mental health resilience services among employers."
David Mobbs, CEO, Nuffield Health, said: "It's about employers making small changes to the work place environment, to make it more active. Doing more physical activity can mean that health can become the new wealth."
Jones added: "Health benefits for active people are priceless, but with increased pressures both in the workplace and at home, as well as the struggling economy, we, as employers, have a responsibility to help our workforce to be as resilient, fit and well as possible.
"Although helping business to develop sustainable practices is important, it is the productivity and success of our people that has the greatest impact. Poor mental health can be very isolating, support is crucial, but wellbeing programmes and prevention can do so much more."
The report finds people who do not exercise have almost 80,000 more hospital inpatient visits a year. With an average inpatient stay in an NHS hospital costing £3,215, this demonstrates a potential cost saving of £257 million a year if people were to get active.