UK majority live in households that receive more in benefits than they pay in tax, ONS data show

A record 35.8 million people lived in households that received more in state benefits and services than they paid in taxes in the year ending March 2024, according to new figures from the Office for National Statistics. The data show 53.3% of the population being net recipients, a share higher than any year outside the Covid era peak.

The figure is up from 52.6% the previous year and follows a long-running trend: net recipients rose from about 40% in the 1980s to roughly half around the 2009 financial crisis, spiked to 55% in 2020/21 during the pandemic, and has since eased only modestly. The ONS measures the gap between sums received by households in benefits—including NHS services and education as well as welfare handouts—and those they contribute in taxes.

Analysts say the figures underscore broader questions about the sustainability of high welfare and health spending as taxes rise toward the highest level since the 1940s. Labour’s welfare reforms have stalled in Parliament, complicating efforts to curb the benefits bill. Pat McFadden, the Work and Pensions Secretary, faces a difficult task in reducing the cost while addressing long standing concerns about work ability and sickness in the workforce.

Critics warn that a higher tax burden risks driving wealth creators abroad. Elliot Keck, head of campaigns at the TaxPayers' Alliance, argued that the state has long relied on high earners to fund public services and urged Labour to back off steep tax hikes to encourage entrepreneurs, investors and business people to stay or return. The debate centers on how to balance a growing welfare bill with incentives for economic growth as the Budget approaches.

Beyond broad welfare costs, policymakers are paying close attention to disability and sickness trends. The data come as the Centre for Social Justice highlighted rising disability benefits claims, noting about 650,000 people were claiming Personal Independence Payments for anxiety and mood disorders in July, with roughly 250 more added each day since Labour took office. The trend has fed concerns about the so called sick note epidemic and its impact on labor supply and productivity.

Business groups have repeatedly warned that high absence due to long term sickness reduces growth potential. The British Chambers of Commerce has described Britain as the sick man of the G7, citing around 7% of the workforce out of work for long-term health reasons, higher than Japan’s 3.5%. In this environment, economists have warned that the public finances remain constrained and that the November Budget will be closely scrutinized for how it addresses a projected hole estimated by economists at around £20-30 billion.

The ONS figures measure the gap between benefits received by households, including health and education services as well as welfare payments, and the taxes they pay. They reflect policy choices, demographics, and labor-market conditions that together shape the size of Britain’s welfare bill. While the government has pledged to protect essential services, critics say the rising share of households that are net beneficiaries complicates attempts to restore fiscal balance and raises questions about the long-term sustainability of public spending as the country navigates economic headwinds.