Feeling the benefit

Think tank: Centre for Social Justice

Author(s): Joe Shalam; Gavin Rice

October 16, 2022

This report from UK think tank the Centre for Social Justice looks at how Universal Support can help get Britain working.

In this paper we reveal the changing appearance of benefits in Britain. While the rise in UK economic inactivity (which hit nine million in October 2022) is increasingly well known, we wanted to better understand the picture of those who have fallen out of work and onto mean-tested benefits since the pandemic. With an original analysis bringing together six datasets across the Universal Credit and legacy benefit systems, we show for the first time the full extent to which the number of people claiming working-age benefits has risen in recent years. We find: The total working-age benefit caseload has risen by 23 per cent since the onset of the pandemic, and by 28 per cent since 2019. There are 1.9 million more people claiming working-age benefits than there were three years ago, and 1.6 million more than pre-pandemic, at a total of 8.7 million people. The caseload for claimants with No Work Requirements (due to poor physical or mental health, disabilities or caring responsibilities) has risen by 15 per cent since the onset of the pandemic, and by 20 per cent since 2019. We estimate there to be nearly 3.5 million claimants today with No Work Requirements. This is up by 460,000 since 2020, and by over half a million (570,000) since 2019. The pandemic has produced a massive ‘social backlog’. We estimate there to be around 1.2 million more working-age benefit claimants today than if pre-pandemic trends had continued, including 260,000 more claimants with No Work Requirements. With economic inactivity rising, more people are likely to fall into the benefit claiming cohort. The Office for National Statistics revealed in October 2022 that 640,000 more people have become economically inactive since the pandemic, including 378,000 who are no longer working due to long-term sickness. The longer people are out of work with health problems the less likely they are to return to employment. Public spending on working-age benefits has risen by over £13 billion since 2019 in real terms. While it is vital that benefits are uprated in line with inflation in 2023 to provide a fair minimum income, the spike in benefit expenditure is driven by a rapidly increasing caseload. We ignore these developments at our peril. Doing so means yet thousands more missing out on the social, financial and health benefits of employment. It means children growing up deprived of the advantages of a home-life shaped by parents going out to work. And it means the economy leaving the immeasurable potential in our communities untapped.