What does the UK spend on welfare – and how much will it rise?
Welfare spending is forecast to rise sharply over the next few years, driven by the UK's ageing population 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 is forecast to have spent £313.0 billion on welfare in 2024/25, 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 annual spending on welfare to reach £373.4 billion in 2029/30.
This is up £60.4 billion on the figure for 2024/25 – an increase of nearly a fifth.
Welfare spending as a proportion of GDP is forecast to fall slightly to 10.8%, however.
– What takes up the biggest share of the welfare budget?
Spending on pensioners.
Some £150.7 billion was spent on pensioners in 2024/25, accounting for nearly half (48%) of the total welfare budget.
Besides the state pension, this spending also includes pensioner housing benefit, pension credit and the winter fuel payment.
Spending on pensioners is forecast to reach £181.8 billion by 2029/30, but this would still be just under half (49%) of the full welfare budget.
– How does the rest of the welfare budget break down?
The next largest chunk of spending goes on Universal Credit, which made up 28% of the 2024/25 budget (£87.8 billion).
It was followed by disability benefits at 13% (£41.4 billion) and child benefit at 4% (£13.3 billion), with other types of spending – including social security in Northern Ireland – accounting for 6% (£19.9 billion).
– Is spending set to increase for all types of welfare?
No.
The child benefit budget is forecast to remain largely flat, at £13.6 billion in 2029/30, compared with £13.3 billion in 2024/25.
By contrast, spending on disability benefits is forecast to jump to £56.3 billion by 2029/30, up from £41.4 billion in 2024/25.
Spending on Universal Credit will reach £99.0 billion, up from £87.8 billion.
– Why is welfare spending rising?
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%.
Of the forecast £60.4 billion extra spending on welfare in 2029/30, pensioners are responsible for just over half of the amount, at £31.3 billion (51%).
The second factor identified by the OBR as driving an increase in welfare spending is the rise in people eligible for health and disability benefits.
Spending on disability benefits, which includes disability living allowance and personal independence payments, accounts for £14.9 billion (25%) of the £60.4 billion extra spending on welfare in 2029/30.
– How does spending on health and disability benefits break down by age group?
The OBR defines health and disability benefits as covering the following entitlements: the standard allowance and health element spending for Universal Credit claimants; employment and support allowance; incapacity benefit; severe disablement allowance; income support for incapacity; disability living allowance; personal independence payment; attendance allowance; spending on the Universal Credit carer's element; carer's allowance, and income support for carers.
Spending on all these benefits was estimated to be £75.7 billion in 2024/25, three-quarters of which (75% or £56.9 billion) went to working-age adults.
Just under a fifth (19%, or £14.2 billion) went to pensioners, while 6% (£4.5 billion) went to children.
Although the amount spent on health and disability benefits is forecast to rise to £97.9 billion in 2029/30, the proportions are expected to remain broadly the same: 74% on working-age adults (£72.3 billion), 19% on pensioners (£18.3 billion) and 7% on children (£7.0 billion).
– How does welfare spending compare with other government departments?
In 2023/24, actual spending on health and disability benefits was £66.3 billion.
This was more than than the total departmental expenditure on defence (£57.6 billion) or transport (£32.6 billion), but well below the figure for education (£127.0 billion) and overall health and social care spending (£196.7 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 departments.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Gizmodo
12 minutes ago
- Gizmodo
Good News! Jeff Bezos Is Married
Jeff Bezos is officially off the market. The Amazon founder married his fiancée, former TV anchor Lauren Sánchez, in a lavish ceremony on Friday, June 27, on the private island of San Giorgio Maggiore in Venice, Italy, capping a multi-day spectacle of wealth, power, and controversy. Sánchez shared a radiant Instagram post of herself in a flowing white dress alongside Bezos, suited up in a tuxedo. The wedding marked the culmination of a multi-day spectacle that drew 200 celebrity guests, dozens of private jets, luxury yachts, and plenty of social media attention. Among the A-list attendees: Oprah Winfrey, Kris Jenner, Kim and Khloé Kardashian, Barbra Streisand, George and Amal Clooney, and Leonardo DiCaprio, who, notably, once became the subject of an internet meme after an awkward red-carpet encounter with Sánchez. View this post on InstagramBut on the streets of the historic city, a different story was unfolding. As Gizmodo previously reported, the announcement of the wedding's location sparked immediate and organized protests from locals. Under the banner of 'No Space For Bezos,' a dozen Venetian organizations, from housing advocates to anti-cruise ship campaigners, denounced what they see as the exploitation of their city. Protesters argue that the wedding, with an estimated price tag north of $50 million, exemplifies the forces that are making Venice uninhabitable for its own residents: rampant overtourism, soaring housing costs, and the constant threat of climate-induced flooding. They staged small-scale demonstrations throughout the week, unfurling anti-Bezos banners at iconic sites. The pressure ultimately forced the couple to move their main reception party to the Arsenale, a medieval complex deemed more secure and less susceptible to protest flotillas. The city's governor, Luca Zaia, defended the wedding as an economic boon, but critics on the ground pointed to Amazon's controversial labor practices and ongoing tax disputes as reasons for their concern. Bezos' wedding is a raw display of power. In the 21st century, tech billionaires are the new royalty, and their weddings have become de facto coronations. They are meticulously crafted PR events designed to project an image of benevolent, cultured, and almost feudal power. The pre-wedding invitation, as previously discussed, was a perfect example of this. It kindly requested 'no gifts' and instead highlighted the couple's donations to three local environmental research groups. It's a classic move: wrap an event of staggering carbon-footprint excess in the soft packaging of eco-philanthropy. The message is clear: we can afford to buy an entire city for a weekend, and we can also afford to save it. Ultimately, the Bezos-Sánchez wedding serves as a powerful symbol of our era, where the logistical power of a tech empire can requisition a historic city, where the line between celebrity and tech titan has completely blurred, and where even the most extravagant displays of wealth come with a carefully worded press release about giving back.
Yahoo
16 minutes ago
- Yahoo
Motor racing-Former Ferrari boss Montezemolo becomes a McLaren Group director
By Alan Baldwin LONDON (Reuters) -Former Ferrari boss Luca di Montezemolo has joined the board of historic rival McLaren, a move that would have been unimaginable not so long ago. A filing with Companies House by Abu Dhabi-owned McLaren Group Holdings, which controls Woking-based sportscar maker McLaren Automotive, registered Montezemolo as a director on June 27. The 77-year-old Italian joined Ferrari in 1973 as founder Enzo Ferrari's assistant and became team manager in 1974, a year before the late Austrian triple champion Niki Lauda secured his first title. He also presided over the Formula One team during a golden era when Michael Schumacher won five of his career seven titles between 2000-2004 and served as chairman of both Ferrari and parent FIAT. McLaren and Ferrari, the two oldest and most successful teams in Formula One history, have been rivals for decades and were involved in a notorious 'Spygate' scandal that erupted in 2007. British-based McLaren were stripped of all their championship points and fined a record $100 million over a dossier of stolen Ferrari technical documents found in the possession of McLaren's chief designer. Both Ferrari and McLaren are under different management now, with Montezemolo resigning his roles at the Italian luxury sportscar maker in 2014 and focusing on other business interests. CYVN, majority-owned by the government of Abu Dhabi, created McLaren Group Holdings in April after completing its acquisition of McLaren Automotive. The group includes a non-controlling stake in McLaren Racing, the Formula One team whose majority shareholder is Bahrain's Mumtalakat and which operates completely independently. Paul Walsh, executive chairman of McLaren Racing, is also one of the nine directors of McLaren Group Holdings, while McLaren team principal Andrea Stella previously worked for Ferrari. McLaren are the reigning Formula One constructors' world champions while Ferrari last won a title in 2008. Seven times world champion Lewis Hamilton, who took his first title for McLaren in 2008, is now driving for Ferrari. News of Montezemolo's new role was greeted with some amazement in Italy. "Montezemolo-McLaren: What a slap in the face to Ferrari," said sports newspaper Tuttosport in a headline. ANSA news agency quoted Montezemolo as saying his heart "is and always will be red" and his new role was on the automotive side and did not involve Formula One.
Yahoo
32 minutes ago
- Yahoo
My wife and I have $7,000 in pensions, $140,000 cash, plus $3,500 in Social Security. Can we afford to retire?
I am contemplating retiring at the end of the year. I'm married and will receive two monthly pension payments; $3,600 from military service and $1,500 from civil service. Our total projected monthly cost of living will be covered by these, making our $3,500 in joint Social Security income completely disposable for savings, travel, etc. I don't have much savings, only about $140,000 between cash savings and a Thrift Savings Plan. Our take-home total each month will be just over $7,000 and, after taxes, medical, dental, vision expenses, and life insurance, our total cost of living will be around $4,000. My wife will be 65 in January, and I'll hit that age 13 months later. My brother stole $100K from my mom to buy bitcoin. Do I convince her to sue him? Most American weddings are a lot more extravagant than the nuptials of Amazon's Jeff Bezos 'He doesn't seem to care': My secretive father, 81, added my name to a bank account. What about my mom? S&P 500 scores record high for first time in 4 months. What could push stocks higher from here? What drove stock market's record-breaking week? Don't overlook growing rate-cut expectations. My wife of 20 years is a Japanese national and lives in the U.S. as a permanent resident. She has not worked in the U.S. and did not have enough work years in Japan to qualify for her Social Security. Her only income once I retire will be the spousal benefit from my Social Security. I will enroll my wife in survivor-benefit plans for my military pension and civil service annuity. These, combined with the increase in Social Security, will give her about $5,000 per month if I predecease my wife, plus a one-time $240,000 life-insurance payment. She will also receive spousal benefits, based on my working record, while I am still alive. Due to my military service, we have Tricare to cover costs above Medicare. We are both currently reasonably healthy. I think we're good financially to retire. What is your advice? Contemplating Related: I'm 75 and have a reverse mortgage. Should I pay it off with my $200K savings — and live off Social Security instead? My answer falls on a razor's edge. Military service can take a lot more of a toll physically and mentally. You deserve this time. I have a theory on your letter. You put a lot of hard work and due diligence into your military and civilian careers, and you are putting the same consideration into your decision about whether to retire. The answer, of course, is yes, you can support yourself and your wife in retirement, given your pension and Social Security benefits, which are based, I assume, on settling for less than your full Social Security income by claiming them before the age of 70. If you can retire and delay claiming your Social Security, all the better. Ordinarily, I would urge people to hang on until they're 70 before claiming Social Security, especially if they are healthy. The rise in the cost of living will eat into your income over 30 years. What's more, you and/or your wife may require long-term care. But you and your wife have more than 40% of your total monthly income left over after all your essential expenses are paid. Your wife will benefit from Social Security spousal benefits while you are both living, and survivor benefits if you die before her. Given that you have been married for 10 years, your wife would qualify for 50% of the value of your Social Security, even if she did not work and/or only worked for a limited time. She will get 100% of her Social Security benefit at full retirement age, which is 67 for anyone born in 1960 or after, and she would receive a lesser amount if she claimed at any time from the age of 62 until full retirement age. If she waits until 70, your wife would receive roughly 8% more per year. Two years of expenses in cash are often recommended for retirees, but I'm waving an amber flag: You still may be leaving yourself a little stretched in case you need money for maintenance on your home or other unexpected expenses. Most retirees with IRAs and/or 401(k)s want to have a cash cushion to avoid drawing on their investment accounts in bear markets like those of 2000-2002 (tech bubble) and 2007-2009 (subprime mortgage crash). You won't be worrying about the ebbs and flows of the stock market like the millions of Americans nearing retirement age with a 401(k) or IRA, given that you have a guaranteed, fixed military and civil-service pension. That's a huge weight off your minds, and should give you both confidence when you finally decide to hang up your work boots and enjoy having all your time together, which I hope includes travel and discovering new hobbies. Don't miss: Should I take a $61,000 lump sum or $355 a month for life? For those who will be drawing on investments, T. Rowe Price recommends retirees have a portfolio composed of 60% stocks and 40% bonds, which recovered from the aforementioned bear markets within two years. 'The exact amount you want to have also depends on your risk tolerance and the amount you have saved,' it adds. 'Another advantage of taking a balanced approach is that during a bear market stocks and bonds are rarely in decline at the same time.' There's a lot to be said about the benefits of a military pension on your investing strategy and peace of mind. 'Having more guaranteed income means you won't have to withdraw as much money from your investments,' according to First Command, a broker-dealer based in Fort Worth, Texas. 'That may affect how you choose to allocate those funds, potentially allowing you to focus less on short-term liquidity and more on long-term growth.' 'Your military retirement income may also give you more options when it comes to constructing a budget,' it adds. 'One approach to consider is using guaranteed sources of income — like a military pension and Social Security — to pay for your fixed expenses, and using the income generated by your investment portfolio to pay for discretionary expenses. The idea is simple: to match fixed expenses to fixed sources of income and variable expenses to variable sources.' Of you and your wife's three main sources of income — guaranteed (pensions), variable (investments) and one-off (inheritance or lump sum payment from a former employer) — your biggest source, happily, is guaranteed. That's a nice place to be. 'If your anticipated expenses significantly exceed your anticipated income,' First Command says, 'it might be a sign that you need to make adjustments to your goals or push back your planned retirement date.' Don't miss: We're living in 'end times' when you can't retire on $1 million But here's a recap so you know what's at stake by claiming Social Security early. You get 100% of your Social Security benefit at full retirement age, which is 67 for anyone born in 1960 or after, and you receive a lesser amount if you claim at any time from the age of 62 until full retirement age. If you wait until age 70, you receive roughly 8% more per year. Some advisers say it can work out roughly the same whether you start taking your benefits at 62 or at 70. As you suggest, your wife, even if she has no work record or a low benefit entitlement on her own work record, is eligible to receive one-third to one-half of your Social Security benefit while you are both living, according to the Social Security Administration. Survivor benefits are more generous. 'A widow is eligible for between 71% (at age 60) and 100% (at full retirement age) of what the spouse was getting before they died.' You can learn more here about such benefits. The financial argument suggests people should delay their Social Security benefits as long as possible, especially if they are in good health, as you seem to be. Virtually all workers between 45 and 62 should wait until beyond 65 to collect Social Security, according to this working paper from researchers at Boston University and the Federal Reserve Bank of Atlanta. More than 90% of people should wait until they reach the age of 70, yet only 10% appear to do so, they added. To put that in context for your retirement: Claiming Social Security early reduces household lifetime discretionary spending by $182,370 for the median worker nearing retirement, the paper concluded. 'Optimizing would produce a 10.4% increase in typical workers' lifetime spending,' the researchers wrote. 'For one in four, the lifetime spending gain exceeds 17%. For one in 10, the gain exceeds 26%.' But not everyone has a $5,100 combined pension. The longer you can wait, the better. There's no great rush to retire tomorrow. That would seem to make a powerful case for waiting to claim your Social Security benefit, but that's not necessarily true for everybody,' First Command adds. 'For those with health issues, it may make more sense to claim their benefits early. And those who need Social Security to retire may place a higher value on being able to quit working while they are still relatively young.' You both know your own lifestyle. If you feel 100% ready, go for it. Related: My friend, 83, wants to add me to his bank account to pay his bills. What could go wrong? Previous columns by Quentin Fottrell: 'She acted as a mother to me growing up': My stepmother remarried after my father died. How can I claim my inheritance? 'My wife and I are very grateful': Our son wants to pay off our mortgage before we retire. Will this backfire? 'Is this ethical?' I want to leave my home to my children from my first marriage — and not to my second husband. JPMorgan has a new way of forecasting the stock market — and there's a surprising finding My job is offering me a payout. Should I take a $61,000 lump sum or $355 a month for life? Coinbase's stock is up over 40% this month as Wall Street projects amazing profit growth There's an important market indicator that suggests investors remain wary. It's good news for stocks. 20 banks expected to increase their dividends the most following the Fed's stress tests Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
