Benefits: Who gets them and how much do they cost?
- Published
Chancellor Jeremy Hunt has announced how much benefits will rise in 2024.
The changes will take effect from April.
How much will benefits increase?
Most working-age benefits will rise 6.7%, which is in line with September's CPI inflation rate.
Inflation measures how fast prices are rising based on the cost of a basket of goods.
State pensions will go up in line with the so-called triple lock, which means they rise by inflation, average earnings or 2.5%, whichever is higher.
This year, the highest was the rise in average wages, which was 8.5%.
In Scotland some disability benefits are devolved, meaning the Scottish government decides how to increase them.
Benefits are fully devolved in Northern Ireland, but changes are likely to be similar to those for the rest of the UK.
How are the rules on benefits changing?
Jeremy Hunt announced that claimants who have not found a job after 18 months would be put on mandatory work placements, "to increase their skills and improve their employability".
He said that claimants who did not engage with the process after a further six months would have their benefits stopped.
How much is spent on benefits?
In August 2023, 22.6 million people, external were claiming some form of benefits, in England, Scotland and Wales.
In 2023-24, the government is expected to spend, external £265.5bn on paying pensions and benefits, just over half of which (£134.8bn) goes on benefits to pensioners.
By comparison, the government is expected to spend £245bn on health.
Universal credit
After the state pension, universal credit, external (UC) is the government's highest benefit spend, allocated £59.8bn this year.
In October 2023, 6.2 million people, external were claiming it, about 38% of whom have jobs.
UC is a monthly payment to help with living costs, external. It was introduced to replace a number of existing benefits, including:
child tax credit
housing benefit
income support
income-based jobseeker's allowance
Housing benefit
It is expected that £14.3bn will be spent on housing benefit, external this year, which helps people pay their rent.
In May 2023, there were, external 1.3 million working-age recipients and 1.1 million of pension age.
Housing benefit is gradually being replaced by UC.
Disability benefits
The main benefits, external for disabled people are:
employment and support allowance, external (ESA), which helps with living costs (£8.2bn)
personal independence payment , external(PIP), which helps with daily living costs and getting around (£21.8bn)
disability living allowance, external (DLA), which is in the process of being replaced, by PIP in England and Wales and adult disability payment in Scotland (£6.7bn)
attendance allowance, external which helps with extra costs to cover carers (£6.7bn)
In February 2023 there were, external:
1.6 million people claiming ESA
4.2 million people claiming either PIP or DLA
1.6 million attendance allowance claimants
Child benefit
The government is expected to spend, external £12.6bn on child benefit this year.
Since 2013, claimants earning more than £50,000 gradually have the benefit reduced the more they earn.
At £60,000 and above, child benefit is fully withdrawn.
And that figure has not been adjusted to reflect rising prices since then, meaning it now affects many more people.
In August 2022, external, seven million families were receiving child benefit.
Personal tax credits
Child tax credit , externaland working tax credit, external are being replaced by UC.
The government is expected to spend, external £8.8bn on them this year.
Pension Credit
Separate from the state pension, pension credit, external helps people over state-pension age with low incomes with living costs, at a cost of, external £5bn in 2023-24.
More than 1.4 million people currently receive pension credit, external, although the government says, external there are significantly more eligible pensioners who do not claim.
How does UK benefit spending compare with other countries?
The UK spends 12.9% of gross domestic product (GDP) - the total value of goods and services produced in the country - on social benefits, according to the latest data, external from the Organisation for Economic Co-operation and Development (OECD).
That puts it in fifth place on the G7 list of big economies.