OBR Forecasts UK Welfare Spending Will Rise Nearly £100 Billion

The Office for Budget Responsibility forecasts that United Kingdom welfare spending will increase by nearly £100 billion between the mid-2020s and the early 2030s. Total expenditure is projected to rise from £333.8 billion in 2025/26 to £431.3 billion by 2031/32, which would increase welfare's share of GDP from 10.9% to 11.3%.

Fiscal analysts identify two primary drivers for this growth. An ageing population combined with the triple lock pension guarantee is expected to push pensioner spending above £200 billion for the first time. Simultaneously, a rise in eligibility for health and disability benefits is projected to drive spending in that sector beyond £100 billion by 2028/29.

The watchdog noted significant uncertainty regarding these projections. If post-pandemic caseload growth rates persist, the agency warns that "this could add around £25 billion to welfare spending by 2031/32" beyond the current estimates.