Spending on benefits across Great Britain is forecast to reach almost £343bn this financial year, with pensions accounting for nearly half of the total. The Department for Work and Pensions (DWP) forecasts that £342.8bn will be spent in real terms during 2026/27, according to analysis by Full Fact of the latest official figures.
This is up from £329.1bn during the previous financial year and comes as the cost of welfare continues to be one of the most widely debated areas of UK Government spending.
State Pension remains the largest cost
The latest DWP benefit expenditure and caseload tables contain historical and forecast spending across the social security system. The forecasts are consistent with the Office for Budget Responsibility's March 2026 Economic and Fiscal Outlook.
Full Fact said the State Pension represents the largest individual part of welfare spending, followed by Universal Credit and then incapacity and disability benefits.
However, the overall benefits figure includes payments made to millions of people above State Pension age and should not be interpreted as spending solely on working-age benefits.
Nearly half of spending goes on pensions
Full Fact's analysis found that nearly half of the £342.8bn forecast for 2026/27 will be spent on pensions.
The State Pension is uprated each year under the Triple Lock, which guarantees an increase by whichever is highest out of inflation, average earnings growth or 2.5 per cent.
The full New State Pension increased to £241.30 per week for the 2026/27 financial year, while other benefits were also uprated from April.
Spending trends and claimant numbers
Overall benefits spending is forecast to have increased by around 16 per cent in real terms since 2020/21.
However, as a proportion of gross domestic product (GDP), spending remains below the level recorded during 2020/21, when the economy and welfare system were heavily affected by the coronavirus pandemic. Full Fact said benefits spending as a share of GDP has nevertheless been rising since 2022/23.
The scale of welfare expenditure also reflects the large number of people receiving at least one payment.
DWP figures show that 24.3 million people across Great Britain were claiming some form of benefit in August 2025, according to Full Fact. Of these, around 10m were of working age.
The total includes people receiving the State Pension as well as those claiming working-age payments including Universal Credit and disability benefits.
DWP publishes detailed expenditure and caseload information covering individual benefits, as well as breakdowns by age and different types of support.
The department explains that forecasts are produced using techniques appropriate to individual benefits and take account of demographic, economic, social and policy factors. The forecasts are also updated following major fiscal events to reflect the latest economic and public finance projections from the OBR.
Full Fact said much of the public debate around welfare focuses on working-age benefits, despite pensions accounting for a substantial proportion of overall social security spending.
