Record 35.8 million in UK households live in benefits-net positions, data show

A record 35.8 million people lived in households that received more in state benefits and services than they paid in tax in the year ending March 2024, the ONS said. That figure is the highest outside the Covid-19 pandemic; during the pandemic, the figure rose to 36.5 million, representing 53.3% of the population, up from 52.6% a year earlier.

The figures highlight a long-running trend: from about 40% of people in the 1980s to around half by 2009, rising to 55% in 2020/21 during Covid and remaining well above pre-pandemic levels. The 2023/24 data come as Britain’s tax burden climbs toward its highest level since the 1940s, fueling concerns about the sustainability of public spending.

Analysts warn the trend could worsen under Labour as it seeks to reform welfare and bring down the benefits bill. Elliot Keck, head of campaigns at the TaxPayers' Alliance, said: 'For years the state has been overwhelmingly dependent on high earners to fund the services we all rely on. This has created a situation where around half of the public put in less than they get out. Yet despite this precarious predicament, Rachel Reeves has devoted her time and efforts as chancellor into targeting successful taxpayers, forcing many to flee and putting unsustainable pressure on the public finances. Labour now needs to urgently back off and look at significant tax cuts to encourage the entrepreneurs, investors and business people back to our shores.' The ONS data show that for the year ending March 2024, 35.8 million people lived in households receiving more in benefits than they paid in tax, with the pandemic peak at 36.5 million.

The figures measure the gap between sums received by households in benefits—including NHS services and education—and those they contribute in taxes. The data come as the British Chambers of Commerce warned that Britain’s sick-note epidemic is hobbling growth, with around 7% of the workforce out of work due to long-term sickness—the highest level in the G7. The government faces continued pressure as attempts to reform the welfare bill faced resistance from left-leaning Labour backbenchers, deepening a hole in the public finances ahead of November’s Budget, estimated by economists at around £20-30 billion.

Disability-benefit claims for anxiety and mood disorders rose sharply; the Centre for Social Justice said around 650,000 Personal Independence Payments were being claimed for these conditions in July, with roughly 250 new claims added each day since Labour took office.