Britain's welfare bill has ballooned, with 23 per cent of the working-age population now receiving some form of benefits, according to analysis by The Independent. Labour has branded the rising costs of sickness benefits as “unsustainable” and pledged to cut the budget by £5bn.
More than one in five people aged 16 to 64 claim working-age benefits, including personal independence payment (PIP), universal credit, housing benefit, jobseeker’s allowance, and carer’s allowance. MPs recently approved a watered-down welfare bill after plans to restrict PIP eligibility were postponed pending a review.
The climbdown creates a headache for Chancellor Rachel Reeves, as the welfare squeeze was intended to save £4.8bn a year, later reduced to £2.3bn. The Institute for Fiscal Studies warned the reforms could cost taxpayers £100m by 2029-30 if PIP changes are scrapped.
The modern welfare system originated from the 1911 National Insurance Act, but was formalised under Labour governments from 1945 to 1951. Under the coalition government, Iain Duncan Smith introduced universal credit and a benefits cap, though austerity measures were linked to 190,000 excess deaths in the 2010s, according to the London School of Economics.
Since 2018, disability payments have risen sharply, with PIP expenditure reaching £21.6bn by April 2024, up from £15bn two years earlier. The UK is the only G7 country with fewer people in work than before the pandemic, though health-related benefit claims have also risen in Denmark, France, and Norway.
