The Government's welfare system revamp could result in a million individuals losing their benefits, including those who receive universal credit (UC) and personal independence payments (PIP).
An estimated one million people will be affected by changes to eligibility, including stricter mental health assessment requirements, and the rates at which various benefits are paid to new and current claimants.
Many people with mental health disorders and people who struggle to wash, dress and eat, based on certain criteria, may not receive benefits as a result of the reforms, which are projected to reduce benefits so that only the most severely disabled people qualify.
Chancellor Rachel Reeves has emphasised the need to “get a grip” on the welfare bill, claiming that neither taxpayers nor claimants are benefiting from the current system.
When asked about the proposed welfare cuts, Ms Reeves said: “We will set out our plans for welfare reform but it is absolutely clear that the current system is not working for anyone … and it's not working for the taxpayer when the bill for welfare is going up by billions of pounds in the next few years.”
Over the next four years, the health and disability payments, which is currently £65 billion annually, is expected to rise to £100 billion.
Work and Pensions Secretary Liz Kendall will reveal the specifics of the plans later this week, and the chancellor will reveal the full extent of spending cuts the next week in the spring statement.
But how many people are on benefits at the moment and how does this compare with 2005? Here is what we know.
How many people are on benefits now?
According to the Government’s most recent statistics, 24 million people claimed a combination of DWP benefits in August 2024. Of these claimants, 13 million were receiving their state pension. There were 9.9 million claimants who were of working age, while 75,000 were under 16 (and receiving disability living allowance as a child).
Data from January 2024 shows there were 6.4 million people on universal credit and 163,000 households were receiving the universal credit childcare element in November 2023. There were 3.9 million people on some sort of health-related benefit over 2023-24.
How about in 2005?
The Office for National Statistics estimated that for most of 2005, between 800,000 and 900,000 people were claiming jobseeker’s allowance.
Analysis by the Joseph Rowntree Foundation charity from 2005 indicated that three-quarters of all working-age people who received out-of-work benefits for two years or more in December that year were ill or disabled. This amounted to 2.1 million people.
One-third of the claimants were aged 55 to retirement, one-third were aged 45 to 54 and one-third were under 45.
The number of people claiming benefits has therefore gone up sharply since 2005.
Which benefits have had the biggest rise in claimants?
Universal credit was 6.4 million on January 2024, up significantly since March 2022 when it was 5.5 million.
In January 2024, women accounted for 58 per cent of those receiving UC, up from 57 per cent in January 2023. The ratio of women decreased after the pandemic but has started rising and it is now at its highest level since the implementation of UC began in 2013.
From January 2023 to January 2024, the median age of those receiving UC stayed at 38.
Both those without jobs and those with low incomes are eligible for UC. As of December 2023, 2.4 million UC recipients were employed, accounting for 38 per cent of the total number of recipients. This number has been stable since January 2023.
The number of people receiving jobseeker’s allowance increased by 6.7 per cent to 94,000 claimants between August 2023 and 2024, the low number being due to most unemployed people having been migrated to UC. The number of people getting the state pension increased by 1.6 per cent to 13 million in the same period.
The number of working-age people getting health-related benefits in England and Wales went from 2.8 million people (2019-20) to 3.9 million people (2023-24), an increase of 38 per cent. There has also been an increase in claims from younger individuals and claims for mental health problems.
The number of new disability benefit awards made to under 40s has grown from 4,500 a month in 2019–20 to 11,500 in 2023–24.
Problems with mental health are the primary reason for 37 per cent of new claims, up from 28 per cent before the pandemic, according to the Institute for Fiscal Studies.
However, between 2023 and 2024, the number of people receiving benefits decreased. Claims for employment and support allowance fell by 5.7 per cent to 1.5 million claimants and income support claims dropped by 71.1 per cent to 40,000 claimants.
Housing benefit claims dropped by 14.8 per cent to 2 million between November 2023 and November 2024.
Why has there been an increase?
A number of causes, such as the pandemic, NHS waiting times and the introduction of UC, have contributed to the surge in people claiming benefits, particularly those relating to health, which has resulted in a rise in claims for both disability and incapacity benefits.
Significant economic upheaval brought on by the Covid-19 epidemic and its aftermath resulted in job losses and higher unemployment, which in turn fed a rise in applications for benefits such as UC.
According to Disability Rights UK, the increase in disability benefits is thought to be a result of the UK population ageing and working-age individuals being in worse health.
People may also be seeking incapacity benefits because longer NHS waiting times for treatments and operations are delaying them being well enough to work.
The Institute for Fiscal Studies predicted the number of working-age people claiming health-related benefits could rise by 30 per cent by the end of the decade.
