Health and disability benefits are surging faster in the UK than other rich nations, an influential think-tank has warned.
The IFS has highlighted the pace of the increase amid fears that Britain is climbing the international league table for welfare costs.
The share of the working age population receiving disability and incapacity benefits rose more than a quarter between 2019 and 2023 – far more sharply than in comparable countries.
That was the case for states such as Denmark and France, where overall spending is still considerably higher.
Claims as a proportion of the workforce have been falling in Australia and the US.
The government announced benefits reforms as Rachel Reeves desperately tried to balance the books in the Spring Statement last week.
The government announced benefits reforms as Rachel Reeves desperately tried to balance the books in the Spring Statement last week
But although the curbs are forecast by the Treasury’s OBR watchdog to save £4.8billion in 2029-30, the overall level is still increasing.
The cost of health and disability benefits for working-age people is predicted to go from £61billion this year to £72.3billion in four years’ time.
IFS researcher Tom Waters told the Telegraph the cost of living spike that followed the pandemic might have incentivised people to claim incapacity benefits, which pay more and do not require them to hunt for work.
Mr Waters said: ‘The share of the UK’s national income that goes on health-related benefis for working-age people is not unusual compared to other well-off countries.
‘What is unusual is the recent growth: spending on these benefits increased from £37billion just before the pandemic to £56billion now.’
Mr Waters said: ‘The plans recently announced by the Government amount to a significant cut in the size of the incapacity and disability benefit system – though the OBR’s forecast is that these will only serve to slow the rise, rather than put it into reverse.’
Meanwhile, fresh questions were raised over Labour’s drive to ‘coach’ Brits back into work.
The Chancellor announced last week that £1billion will be invested ‘to provide guaranteed, personalised employment support’.
Benefit claimants can currently access work coaches at job centres in various ways, including being offered advice and referred for job opportunities.
The IFS has pointed to the way incapacity benefits have become more attractive over time
The NAO report published today found around 2,100 fewer work coaches were employed on average by the department than the estimated need between April and September last year.
It attributed the shortfall to a combination of factors including funding and challenges with recruiting and retaining staff.
Meanwhile, between September 2023 and November 2024 more than half (57%) of job centres reduced their support for universal credit claimants under the flexibilities DWP allows when work coaches have too many cases to deal with, including having less frequent or shorter meetings with claimants.