Britain's disability benefits bill has rocketed by 109% in the past five years, according to a new analysis that lays bare the cost to the taxpayer. The Institute of Economic Affairs (IEA) warns spending on disability benefits has more than doubled in just five years, with Personal Independence Payment (PIP) expenditure in England and Wales soaring from £13.7 billion to £28.5 billion.
Welfare spending surpasses income tax revenue
The IEA's research team is alarmed that Britain's overall welfare bill, including pensions, has hit £334 billion, more than the £329 billion raised through income tax. They are concerned that state pension spending increased by 43% in half a decade, from £102 billion in 2020-21 to £146 billion in 2025-26.
Dr Valentin Boboc, chief economist at the Institute of Economic Affairs, said: “Disability benefit spending has more than doubled in just five years, adding nearly £15 billion to the annual welfare bill. This rate of growth should be a serious concern for anyone who cares about the sustainability of our public finances. Britain is now spending more on welfare than it raises through income tax. That should be a wake-up call for ministers, who cannot continue to ignore the growing cost of the benefits system. Reform must focus on making sure support reaches those who genuinely need it, while helping more people into work and reducing unnecessary spending. Without action, the growing welfare bill will put even greater pressure on taxpayers and the public services people rely on.”
Political responses to the rising costs
Conservative Shadow Work and Pensions Secretary Helen Whately responded to the figures, saying: “Labour will never get a grip on the welfare bill, because their Left-wing backbenchers will never let them. Britain is not getting twice as sick. Benefits have become easier to get, and people who are savvy have learnt how to game the system. [We] would end disability benefits for low-level mental health claims and bring back face-to-face assessments, alongside a root and branch review of PIP.”
A spokesperson for the Department for Work and Pensions said: “We are already reforming the welfare system by narrowing the gap between Universal Credit standard and health rates, restoring face-to-face assessments and investing £3.5 billion in employment support to end the culture of people being signed off and written off. In addition, the share of PIP awards increased after a review has more than halved since 2024 and is at its lowest since records began, while this year more people had their award reduced or stopped than increased. We have also commissioned the Milburn and Timms reviews, due in the autumn, which will lay the foundation for sustainable reform.”
The figures come amid broader concerns about the sustainability of public finances, with the welfare bill now exceeding income tax revenue. The government has pointed to ongoing reforms and reviews as steps toward addressing the rising costs.
