A new report has identified a £2,500 gap between what some benefits claimants can receive and what a full-time worker earns, as the UK's worklessness crisis is described as a national emergency.
The Centre for Social Justice (CSJ) found that around 6.7 million people across England, Wales and Scotland receive at least one out-of-work benefit. The report identified 3,369 areas across England and Wales where worklessness dominates, with a combined population of 860,000 and an average of 250 residents per area.
Workless neighbourhoods and health-related benefits
The findings also noted that in more than 19,000 neighbourhoods, more than one in three working-age adults claim out-of-work benefits, with almost six million people living in these areas. The main out-of-work benefits are Universal Credit and Jobseeker's Allowance, and it is possible to be eligible for both at the same time. However, New Style JSA payments count as income when claiming Universal Credit and will reduce the amount of Universal Credit received.
The CSJ report, chaired by former Work and Pensions Secretary Sir Iain Duncan Smith, warned that the UK's low unemployment rate disguises a deeper crisis of hidden worklessness, increasingly driven by health-related benefit claims. The UK has a range of health-related benefits including Personal Independence Payment (PIP) / Adult Disability Payment (ADP), Attendance Allowance / Pension Age Disability Payment (PADP), and Disability Living Allowance (DLA) / Child Disability Payment (CDP). These are non-means-tested benefits, meaning they are paid regardless of income, savings, or assets.
Income comparison and spending forecast
Earlier this year, the CSJ calculated that in 2026-27 an “economically inactive claimant on Universal Credit” who gets the “average housing benefit and Personal Independence Payment” (PIP) for ill-health would receive an income of around £25,000. The figure could rise to £27,500 for those who receive the highest PIP rate.
In contrast, a full-time worker on the National Living Wage is expected to earn £22,500 after paying income tax and National Insurance – leaving a “£2,500 gap between work and welfare for existing claimants”. Government spending on benefits is expected to increase to £136.1 billion in 2026/27.
Call for overhaul
Sir Iain claims that the worklessness problem has become normalised despite causing significant damage to the nation. He added: “Britain is now living with levels of worklessness that would once have been treated as a national emergency. Yet because much of that worklessness is recorded as incapacity rather than conventional unemployment, it has gradually become accepted as a fact of life since the pandemic. This is not good enough. Lives are being ruined and yet this issue hides in plain sight.”
The CSJ is calling for an overhaul of health-related benefits to restore incentives to work and replace a system it says risks writing people off with personalised support towards employment.
