Proportion of households on benefits soars

Ben Southwood
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THE PROPORTION of UK households receiving benefits has soared over the past decade, data reveals today, as did the proportion receiving more benefits than they paid in tax.

The number of non-retired households receiving any cash benefit barring child benefit rose from 40.3 per cent in the 2000-2001 tax year to 44.6 per cent in 2010-2011, the data from the Centre for Policy Studies (CPS) and the Office for National Statistics showed – an increase of around 1m households.

And the number of households who were net recipients of the state – meaning they paid less in taxes than they received through all forms of benefits and state services – rocketed up from 43.8 per cent in 2000-2001 to 53.4 per cent in 2010-2011 – an increase of around 3m households.

Funding this transfer are the best-off households – the top fifth of households by income paid £20,125 more in taxes than they received in benefits. This contrasts with the bottom two quintiles, who both received around £10,000 more in benefits and services than they paid in taxes.

Part of this development comes from demographic change, as retired households tend to draw on a large amount of state cash through healthcare and the state pension – but even excluding pensioners there has been a transformation. Just 29 per cent of non-retired households were net recipients of the state in 2000-2001, whereas in 2010-2011 the figure was 39.6 per cent.

“These trends are unsustainable,” said CPS boss Tim Knox, “particularly given the ageing profile of the UK population.”

“Reversing the trend will require...tough policies to get more people into work,” Knox warned.