Number Of Benefit Claimants Exempt From Working Reaches 4 Million For The First Time

Figures from the Department for Work and Pensions (DWP) reveal that the number of people on UC who don’t have to look for a job has risen to 4.03 million as of October — the first time it has crossed the four million mark. This number was 3.9 million in September and is 50% higher than the 2.7 million recorded in July 2024, when Sir Keir Starmer became Prime Minister.

This means that half of all eight million UC claimants are now exempt from job searching. The government says part of this increase is due to people being moved from older welfare schemes to Universal Credit, but the figures still present a major challenge for Chancellor Rachel Reeves, who has faced setbacks in her welfare reform plans after a rebellion within her party.

The cost of incapacity and disability benefits is also a growing concern, with projections showing it could reach £100 billion a year by the end of the decade.

The data also highlights that 1.24 million foreign nationals are now claiming UC — the highest on record — with EU citizens with settled status making up the largest share. Meanwhile, the number of working-age adults not in employment or seeking work remains high at 2.8 million, compared to 2.1 million before the COVID-19 pandemic.

Another trend shows more over-55s leaving work permanently, and many are being shifted from one benefit to another without reassessment. A growing number of people are also receiving both incapacity and disability benefits, sometimes totaling over £10,000 a year.

In May, the number of people not required to look for work but still receiving Personal Independence Payments (PIP) surpassed one million for the first time.

To address this, the government has launched an independent review into the increasing number of young people not working or studying, many of whom aren’t even claiming benefits. The review will be led by Alan Milburn, former Labour health secretary, and the report is expected next year.

A separate study by the Centre for Social Justice (CSJ) found that the issue extends beyond young people. Since Labour took power, there are 200,000 fewer under-35s on payrolls, and unemployment has risen to 5%. The CSJ is urging Ms. Reeves to reform mental health benefits, suggesting that those with mild anxiety, depression, or ADHD — around 1.1 million people — should receive NHS treatment instead of cash benefits.

A DWP spokesman said: “The number of people receiving Universal Credit has been increasing as we have invited tens of thousands of people each month to move from legacy benefits as they become phased out.

“We’re determined to get more people off welfare and into work. That’s why we are stepping up our plan to Get Britain Working with the most ambitious employment reforms in a generation.

“Every eligible young person who has been on Universal Credit for 18 months without earning or learning will also be offered guaranteed paid work through our Youth Guarantee.”