Trends in benefit expenditure

After 1945 social security spending increased almost continuously as a share of national income until the 1980s. This was due to an increase in the generosity of many state benefits as well as an increase in the numbers eligible to claim them. This trend accelerated when unemployment increased. For example the number of people claiming unemployment benefits increased from 340,000 in 1950 to over 1.6 million in 1980 (Phillips and Sibieta 2006). 

In 2005/2006, about GBP140.6 billion was spent on social security benefits in GB accounting for 26.9% of total government expenditure. Approximately 30 million people in the UK - over half the total population - receive income from at least one social security benefit. The largest group of beneficiaries are over state pension age but about a third of social security expenditure is claimed by people of working age. 

An important feature of change in the British benefit system has been the shift away from insurance-based contributory benefits. Contributory benefits now account for less than 55% of total benefit expenditure, compared to 70% in the 1960s and income-related benefits have grown from 8% of overall expenditure in the 1960s to 31% in 2006/2007 (Tetteh 2007). In the British system the link between the amount contributed and benefit entitlement, which was once close, has now weakened. 

Source Presentation on Repeat benefit claimants and long term unemployment , Bill Wells, Chief Economist, Department for Work and Pensions, at the Welfare Reform Challenges, Choices and International Insights, DWP International Conference, 26 March 2007, London. 

Source. Table 10.6, Annual Abstract of Statistics 2006 Edition, National Statistics, Palgrave, Basingstoke 

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