Record number of Britons receiving benefits that amount to more than they pay in tax, study finds

Britain’s benefits dependency has hit an all-time high, with more than half of households receiving more from the government than they pay in tax, research suggests.

Analysis by Civitas of Office for National Statistics (ONS) data from 2020-21 showed a record 54.2% of people (36 million) now live in households which received more in benefits than they contributed in taxes.

This includes non-cash benefits such as NHS and education services.

The study also showed 83% of all income tax is paid by 40% of British adults.

Authors Tim Knox and Daniel Lilley say the “net dependency ratio” is the highest on record.

It fell from 52.5% to 47.5% in 2019-20, but grew during the pandemic due to increased government aid.

Civitas, a right-wing think tank, said the long-term trend is “clearly” on the up, comparing the 1977-2000 average of 41.2% with 2020-21’s figure of 54.2%.

It also found around 27 million people receive an average of £23,000 per year in cash benefits and “benefits in kind” – goods and services provided to an employee for free or at reduced costs such as a company car or private health insurance.

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In November it was confirmed disability and working age benefits would be increased in line with inflation.

Chancellor Jeremy Hunt said such benefits will rise by 10.1% from April in line with the rate of inflation at a cost of £11bn.

He also said he was concerned about a “sharp increase in economically inactive working age adults” since the start of the pandemic, and announced a review into the issues holding people back from work.

More than 600,000 people on universal credit will be asked to meet with a work coach “so that they can get the support they need to increase their hours”, he said.

In response to the widespread inactivity, Prime Minister Rishi Sunak said last week: “We need to look at how our welfare system is operating and is it operating in the way that we would like to make sure that we are supporting and incentivising people who can be, to be in work.”