How much does the UK spend on welfare?
Spending in 2023/24 was equivalent to 10.9% of gross domestic product, or the total value of the economy.
The UK’s welfare budget is forecast to rise sharply in the next few years, driven by higher spending on pensioners 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 spent £296.3 billion on welfare in 2023/24, 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 total spending on welfare to reach £377.7 billion in 2029/30, or 11.1% of GDP.
This is an increase of £81.4 billion on the figure for 2023/24, or a jump of 27%.
– Why is the spending forecast to rise?
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%.
Spending on pensioners, which includes the state pension and also pensioner housing benefit, pension credit and winter fuel payments, is forecast to rise from £141.7 billion in 2023/24 to £182.7 billion in 2029/30: a jump of 29%.
While the total spent on pensioners is projected to rise across this period, it will continue to account for just under half (either 48% of 49%) of total welfare spending each year.
The second factor identified by the OBR as driving an increase in welfare spending is the rise in the caseload of people receiving health and disability benefits.
Spending on disability benefits, which includes disability living allowance and personal independent payments, is forecast to rise from £36.3 billion in 2023/24 (accounting for 12% of the total welfare budget) to £59.4 billion in 2029/30 (16%).
Government expenditure on all health and disability benefits across all age groups, including pensioners, is forecast to rise from £67.4 billion in 2023/24 to £100.7 billion by 2029/30, a jump of 56%.
– How does spending on health and disability benefits break down by age group?
Working-age adults accounted for £48.5 billion of the £64.7 billion spent on health and disability benefits in 2023/24, or 75% of the total, according to the OBR.
Pensioners accounted for £12.5 billion (19%) and children £3.7 billion (6%).
In 2029/30, working-age adults are forecast to account for £75.7 billion of the £100.7 billion spent on health and disability benefits, which is again 75% of the total, with pensioners responsible for £17.8 billion (18%) and children £7.2 billion (7%).
– How does this spending compare with other government departments?
The £64.7 billion spent on health and disability benefits in 2023/24 is more than the total departmental expenditure on defence (£57.6 billion) and transport (£32.6 billion), but well below the figure for education (£127.0 billion) and overall health and social care spending (£196.4 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 departmental groups.
