What does the UK spend on welfare – and how much will it rise?
Welfare spending is forecast to rise sharply over the next few years, driven by the UK's ageing population and an increase in the number of people receiving health and disability benefits.
Here, the PA news agency looks at the latest figures and projections for social security and welfare expenditure.
– How much does the UK spend in total?
The Government is forecast to have spent £313.0 billion on welfare in 2024/25, according to the Office for Budget Responsibility (OBR).
This is the equivalent of 10.9% of UK GDP (gross domestic product, or the total value of the economy).
The OBR forecasts annual spending on welfare to reach £373.4 billion in 2029/30.
This is up £60.4 billion on the figure for 2024/25 – an increase of nearly a fifth.
Welfare spending as a proportion of GDP is forecast to fall slightly to 10.8%, however.
– What takes up the biggest share of the welfare budget?
Spending on pensioners.
Some £150.7 billion was spent on pensioners in 2024/25, accounting for nearly half (48%) of the total welfare budget.
Besides the state pension, this spending also includes pensioner housing benefit, pension credit and the winter fuel payment.
Spending on pensioners is forecast to reach £181.8 billion by 2029/30, but this would still be just under half (49%) of the full welfare budget.
– How does the rest of the welfare budget break down?
The next largest chunk of spending goes on Universal Credit, which made up 28% of the 2024/25 budget (£87.8 billion).
It was followed by disability benefits at 13% (£41.4 billion) and child benefit at 4% (£13.3 billion), with other types of spending – including social security in Northern Ireland – accounting for 6% (£19.9 billion).
– Is spending set to increase for all types of welfare?
No.
The child benefit budget is forecast to remain largely flat, at £13.6 billion in 2029/30, compared with £13.3 billion in 2024/25.
By contrast, spending on disability benefits is forecast to jump to £56.3 billion by 2029/30, up from £41.4 billion in 2024/25.
Spending on Universal Credit will reach £99.0 billion, up from £87.8 billion.
– Why is welfare spending rising?
The OBR identifies two main drivers of the increase.
The first is higher spending on pensioners.
This is because of the UK's ageing population and the 'triple lock', which guarantees pensions will rise each year by whichever is highest: the annual rate of inflation, average growth in earnings, or 2.5%.
Of the forecast £60.4 billion extra spending on welfare in 2029/30, pensioners are responsible for just over half of the amount, at £31.3 billion (51%).
The second factor identified by the OBR as driving an increase in welfare spending is the rise in people eligible for health and disability benefits.
Spending on disability benefits, which includes disability living allowance and personal independence payments, accounts for £14.9 billion (25%) of the £60.4 billion extra spending on welfare in 2029/30.
– How does spending on health and disability benefits break down by age group?
The OBR defines health and disability benefits as covering the following entitlements: the standard allowance and health element spending for Universal Credit claimants; employment and support allowance; incapacity benefit; severe disablement allowance; income support for incapacity; disability living allowance; personal independence payment; attendance allowance; spending on the Universal Credit carer's element; carer's allowance, and income support for carers.
Spending on all these benefits was estimated to be £75.7 billion in 2024/25, three-quarters of which (75% or £56.9 billion) went to working-age adults.
Just under a fifth (19%, or £14.2 billion) went to pensioners, while 6% (£4.5 billion) went to children.
Although the amount spent on health and disability benefits is forecast to rise to £97.9 billion in 2029/30, the proportions are expected to remain broadly the same: 74% on working-age adults (£72.3 billion), 19% on pensioners (£18.3 billion) and 7% on children (£7.0 billion).
– How does welfare spending compare with other government departments?
In 2023/24, actual spending on health and disability benefits was £66.3 billion.
This was more than than the total departmental expenditure on defence (£57.6 billion) or transport (£32.6 billion), but well below the figure for education (£127.0 billion) and overall health and social care spending (£196.7 billion), according to the latest Treasury data.
Total expenditure by the Department for Work & Pensions stood at £275.1 billion in 2023/24, up from £239.1 billion in 2022/23 and the highest figure among all government departments.
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8 minutes ago
- Glasgow Times
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8 minutes ago
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