How many people claim benefits now and how does it compare with 20 years ago?

The number of people claiming disability benefits for mental health conditions has significantly increased since the Covid-19 pandemic, with welfare reforms set to impact over a million claimants.

With universal credit (UC) and personal independence payments (PIP) eligibility under review, many individuals who currently receive benefits may no longer qualify under the proposed stricter assessment criteria.

The Government argues that the welfare system must be restructured to reduce costs, with Chancellor Rachel Reeves stating that the current system is “not working for anyone” as welfare spending is projected to increase from £65 billion to £100 billion annually over the next four years.

How many people are on benefits now?

The most recent Government figures (August 2024) indicate that 24 million people claimed some form of Department for Work and Pensions (DWP) benefit.

• 13 million were receiving their state pension.
• 9.9 million were of working age and claiming benefits.
• 75,000 children were receiving Disability Living Allowance (DLA).

Additional data from January 2024 highlights that:

• 6.4 million people were on universal credit (UC).
• 163,000 households were receiving the universal credit childcare element (as of November 2023).
• 3.9 million people were receiving health-related benefits (2023-24).

How does this compare with 2005?

In 2005, between 800,000 and 900,000 people were claiming jobseeker’s allowance (JSA).

A Joseph Rowntree Foundation study from 2005 found that 2.1 million working-age individuals had been on out-of-work benefits for two years or more, with the majority being ill or disabled.

• One-third of claimants were aged 55 to retirement.
• One-third were aged 45 to 54.
• One-third were under 45.

Since then, the number of claimants has increased sharply.

In March 2022, 5.5 million people were on universal credit. By January 2024, this had risen to 6.4 million—a significant increase in just two years.

Changes in benefit claims by demographics

• Women accounted for 58% of universal credit claimants in January 2024, up from 57% in January 2023.
• The median age of UC claimants remained at 38 between January 2023 and 2024.
• As of December 2023, 2.4 million UC recipients were employed, representing 38% of all claimants. This proportion has remained stable since January 2023.

Jobseeker’s Allowance and State Pension Claims

• The number of JSA claimants rose by 6.7% to 94,000 between August 2023 and 2024, although most unemployed individuals have now been migrated to universal credit.
• The number of state pension recipients increased by 1.6% to 13 million over the same period.

The rise in health-related benefits and mental health claims

• The number of working-age individuals on health-related benefits in England and Wales rose from 2.8 million in 2019-20 to 3.9 million in 2023-24—a 38% increase.
• New disability benefit awards for those under 40 increased from 4,500 per month in 2019-20 to 11,500 in 2023-24.
• Mental health conditions now account for 37% of new disability claims, up from 28% before the pandemic, according to the Institute for Fiscal Studies (IFS).

Declining benefit claims in certain areas

Despite the overall increase in claimants, some benefits have seen a decline between 2023 and 2024:

• Employment and Support Allowance (ESA) claims fell by 5.7% to 1.5 million.
• Income support claims dropped by 71.1% to 40,000.
• Housing benefit claims fell by 14.8% to 2 million (between November 2023 and November 2024).

Why has there been an increase in benefit claimants?

Several factors have contributed to the rise in benefit claims, particularly those relating to health and disability:

1. The Covid-19 Pandemic
   • The pandemic caused significant job losses, pushing more people onto universal credit.
   • Mental health conditions worsened, leading to higher disability benefit claims.
2. Long NHS Waiting Times
   • Delays in receiving medical treatment mean some people are unable to work and require incapacity benefits for longer.
3. An Ageing Population
   • The UK’s ageing population has contributed to a rise in disability claims.
4. Universal Credit Replacing Older Benefits
   • The introduction of universal credit (which replaces multiple older benefits) has led to more people enrolling in the system.

Future projections

The Institute for Fiscal Studies predicts that the number of working-age people on health-related benefits could rise by 30% by the end of the decade.

With the Government planning major welfare cuts, the landscape of benefits in the UK is likely to change dramatically in the coming years.

Work and Pensions Secretary Liz Kendall is set to reveal further details on welfare reform later this week, while Chancellor Rachel Reeves will outline spending cuts in the Spring Statement next week.

As eligibility criteria tighten, many claimants—particularly those with mental health conditions—may face losing access to financial support.

Conclusion

The number of people receiving benefits in the UK has risen significantly over the past 20 years, particularly health-related benefits.

With planned welfare cuts and stricter eligibility assessments, millions of people could see their benefits reduced or removed.

The debate over welfare spending and support for vulnerable individuals is set to continue, with many calling for a balance between cost-cutting and ensuring essential financial aid for those in need.