July Budget 2015: George Osborne increased welfare in coalition by £28bn. Where is it spent?

 
James Nickerson
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Pensions have been protected by the government (Source: Getty)

Welfare is one of the big topics of the upcoming July Budget, and so it’s probably important to know where the vast sums of money go.

The UK government spent £251bn on welfare payments during the financial year 2013-14, representing 37 per cent of all government spending, data released by the Office of National Statistics shows. This is marginally up from the £223bn that went on welfare in 2009-10, which represented 35 per cent of government spending.

Not only is this a huge amount of money, but it shows a £28bn increase in welfare expenditure. Below are some of the key areas that will be discussed in this Budget, showing how they have changed:

Pensions have increased substantially since 2009-10 (Source: ONS)

Two areas heavily discussed are pensions and family benefits, with the former accounting for an equivalent of 42 per cent of all welfare spending, while family benefits, income support and tax credits represent 18 per cent of spending.

The retired:

Protected by David Cameron, the largest amount of welfare benefits are spent on state pensions, standing at £83bn, and 33 per cent of total welfare spending.

A further £20bn is spent on public service pensions, which predominantly go to public sector workers.

On top of this is £28bn on “other pensions spending”, including winter fuel allowance, disability allowance, housing benefit and more.

Given the demographic changes that are causing state pensions to be claimed for longer, total pension spending has increased by 25 per cent since 2009-10.

Care:

Personal social services account for £29bn, while £38bn goes on benefits for those who are ill or disabled.

Some £10bn goes towards elderly care payments. During the 2011 census there were 9.2 million people aged 65 of over, making up 16 per cent of the population, which is unlikely to change soon, meaning prolonged spending on elderly care.

Working age:

The figure of £94bn is the key here. £37bn of that goes on child benefit and other family support, while £34bn goes on tax credits to support those who earn a low income.

Meanwhile, £5bn goes towards the unemployed, and in May 2015, there were 791,800 people claiming Jobseeker’s Allowance and Universal Credit, down by 26.9 per cent the year earlier.

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