Abstinence has helped reduce the spread of STDs, but only when backed by a big program of pushing safe sex as well (q.v. Uganda) where an Abstinence only message has been pushes (q.v. Texas) it has failed to either reduce STDs or teenage pregnancies.
Frankly, in British society I believe pushing wide-scale screening for STDs would be a far more effective approach. Nearly all STDs, and all common ones, can be treated quickly and effectively if only they are found while the spread of the remaining few (including the dreaded HIV/AIDS) would doubtless be arrested if people knew they had it.
As to the psychological side of things, the people I know who have sex are in general happier and more balanced than those who choose to abstain. Sex, in my experience, breeds self-confidence and all the good things that come with it.