UK welfare spending is forecast to jump by £79bn to reach £431bn by 2032, driven primarily by post-pandemic surges in health and disability claims. Researchers suggest earlier post-2010 austerity cuts to Universal Credit and housing benefits may have inadvertently driven individuals toward sickness benefits to preserve their living standards. Meanwhile, a formal review led by Alan Milburn is examining youth economic inactivity alongside soaring benefit claims among 16 to 24-year-olds. Policymakers are expected to focus future reforms on curtailing the growth rate of this spending rather than cutting baseline budgets.
Key points
Welfare spending as a share of the economy will rise modestly to 11.3% of GDP, remaining…: Welfare spending as a share of the economy will rise modestly to 11.3% of GDP, remaining beneath the 2013 peak.
Rising claims for Personal Independence Payments among young people represent a rapidly g…: Rising claims for Personal Independence Payments among young people represent a rapidly growing fiscal burden that could hit £6.5bn within five years.
Future policy reforms are likely to concentrate on moderating expenditure growth rather t…: Future policy reforms are likely to concentrate on moderating expenditure growth rather than implementing outright cash cuts across the system.
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Chancellor John Healey and Prime Minister Andy Burnham have both spoken of their desire for the benefits bill to come down, but the government has not yet laid out a timetable for any reductions.
Their political opponents have criticised them for a lack of detail on welfare reform in Wednesday's Budget, accusing the government of delaying difficult decisions over cuts.
Official forecasts released alongside the Budget indicate welfare spending is going to increase by £79bn in cash terms over the next few years.
BBC Verify has taken a look at the numbers behind this thorny political issue and some of the difficult options the government have to bring down welfare costs.
How much is being spent on welfare?
The official forecaster, the Office for Budget Responsibility (OBR), estimates in its latest forecasts that the cost of the welfare system will rise, external from £353bn this year to £431bn in 2032.
The OBR's figures include spending on pensioners, which accounts for just under half of the total. The majority of this cost is on the state pension.
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