Welfare spending is forecast to rise steeply over the next few years, driven by the UK’s ageing population and an increase in the number of people receiving health and disability benefits.
asserted
spending → forecast → benefits
– How much does the UK currently spend?
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UK → spend → much
Spending on pensioners takes up by far the largest share of the welfare budget, accounting for £161.4 billion of the total £333.8 billion in 2025/26, or nearly half.
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Spending → take → 2025/26
The next largest spending is on universal credit, the main means-tested benefit available in the UK, which has replaced the mixture of benefits previously in place such as income support, jobseeker’s allowance, housing benefit and tax credits.
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which → test → support
Some £92.8 billion was spent on universal credit in 2025/26, or just over a quarter of total welfare spending.
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billion → spend → spending
The rest of the total is made up of disability benefits (£45.3 billion in 2025/26), child benefit (£13.4 billion) and other types of welfare, including social security in Northern Ireland which is administered separately (£20.8 billion).
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which → make → Ireland
– How is welfare spending forecast to rise?
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spending → forecast → ?
The OBR forecasts annual spending on welfare to rise by nearly £100 billion between the middle of this decade and the early 2030s.
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spending → forecast → decade
The total is forecast to increase from £333.8 billion in 2025/26 to £431.3 billion in 2031/32, a jump of £97.5 billion.
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total → forecast → billion
Welfare spending as a proportion of GDP is also set to rise across this period, from 10.9% to 11.3%.
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spending → set → %
Spending on pensioners is forecast to pass £200 billion for the first time, rising from £161.4 billion a year to £209.8 billion by 2031/32.
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Spending → forecast → 2031/32
Read More
Universal credit spending increases from £92.8 billion to £110.7 billion, while spending on disability benefits rises from £45.3 billion to £69.6 billion.
– Why is welfare spending rising?
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spending → read → billion
The OBR identifies two main drivers of the increase.
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OBR → identify → increase
This is because of the UK’s ageing population and the “triple lock”, which guarantees pensions will rise each year by whichever is highest: the annual rate of inflation, average growth in earnings, or 2.5%.
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whichever → age → earnings
In its latest economic report, the OBR notes the rise in the state pension age will be complete by March 2028, meaning it has no further downward impact on welfare spending from 2029-30 onwards.
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it → note → 2029
The next rise in the state pension age is currently expected to occur between 2037 and 2039, “meaning the state-pension-age population and therefore pensioner spending is expected to grow significantly until then”.
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population → expect → 2037
The second factor identified by the OBR as driving an increase in welfare spending is the rise in people eligible for health and disability benefits.
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factor → identify → benefits
“High volumes” of new claims for health-related universal credit have pushed up the OBR forecast for spending in this area.
uncertain
volumes → relate → area
Universal credit accounts for £17.9 billion of the £97.5 billion extra spending on welfare in 2031/32, while disability benefits, which include disability living allowance and personal independence payments, make up £24.3 billion.
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which → account → billion
– How does spending on health and disability benefits break down by age group?
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spending → break → group
Spending on all types of health and disability benefits in 2025/26 was estimated to be £85.6 billion, nearly three-quarters of which (£63.0 billion) went to working-age adults.
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quarters → estimate → adults
Some £15.5 billion went to pensioners, while £7.1 billion went to children.
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billion → go → children
Total spending on health and disability benefits is forecast to rise from £85.6 billion in 2025/26 to £120.2 billion in 2031/32.
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spending → forecast → 2031/32
It will pass £100 billion in 2028/29, one year earlier than previously forecast.
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It → pass → 2028/29
The OBR defines health and disability benefits as the following: the standard allowance and health element for universal credit claimants; employment and support allowance; incapacity benefit; severe disablement and disability living allowance; personal independence payment; attendance allowance; and support for carers, including carers allowance.
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OBR → define → allowance
– Is the welfare forecast likely to change?
Yes.
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forecast → change → ?
The OBR says there is “uncertainty” around the outlook for welfare spending, especially related to health and disability benefits “which have seen very significant rises in caseloads since the pandemic”.
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which → say → pandemic
The main forecast has been calculated on the assumption that cases will continue to rise at a slower rate than earlier in the decade, with total welfare spending increasing from £333.8 billion in 2025/26 to £431.3 billion in 2031/32.
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spending → calculate → 2031/32
However if cases were to continue to rise at the post-pandemic growth rate, “this could add around £25 billion to welfare spending by 2031/32”, the OBR said.
uncertain
OBR → continue → 2031/32
Alternatively, if cases slowed to pre-pandemic rates, spending could be around £13 billion lower by the end of this period.
uncertain
spending → slow → period
The Aporia
