Who Benefits?

For the past couple of years the Institute for Fiscal Studies has published “A Survey of the UK Benefits System”. The url for the document can be found at the end of this post. Whilst it is understandable that this document will have a limited readership, it is not judged to set the pulse racing, it deserves to be read much more widely.

Source: IFS Briefing Note BN 13. James Brown, Andrew Hood. November 2012

Source: IFS Briefing Note BN 13.
James Brown, Andrew Hood. November 2012

For those who know a good deal about the benefits system in Great Britain the amount of benefit paid to the various need groups will be quite familiar. For those whose knowledges has been formed from the political debate around benefits it might come as a bit of a surprise. It is strange for example that so much of the debate about the cost of benefits relates to the unemployed. The pie chart to the left shows benefits for unemployed people amounts to 2.57% of the total benefits bill. This includes job seekers allowance, job grant, work credit etc. What is perhaps more interesting is the fact that 21% of benefits go to those who are actually in work. It is strange that there is not more political debate about the need for the state to subsidise employment in this way.

By far the largest recipients of benefits are the elderly and the largest single benefit they receive is the basic state pension and this on its own accounts for almost 29% of benefit expenditure. When added to other items like additional state pension, pension credit, winter fuel allowance etc. the total percentage of benefits accounted for by payments to the elderly are 42%. This of course is set to rise significantly as the baby boom generation hit retirement age.

The IFS report provides some light in an area of debate that is more characterised by heat and should be required reading for politicians of all parties. For those interested the full report can be viewed at: http://www.ifs.org.uk/bns/bn13.pdf