Universal Credit
The question
To ask the Secretary of State for Work and Pensions, what assessment she has made of the potential impact of the increasing number of people receiving Universal Credit to the British taxpayer.
Answered by Sir Stephen Timms
This Government is committed to a social security system which raises employment and living standards by supporting and incentivising people into work and to work more, reduces poverty by supporting people at times of higher cost and dependency, and promotes fairness and controls overall spending to ensure the long-term sustainability of the system for future generations. The Government’s welfare cap rule also helps ensure the long-term sustainability of the welfare system. A new welfare cap covering the current parliament was introduced at Autumn Budget 2024.
The financial sustainability of the benefit system is considered in the round as part of the forecasts for annually managed expenditure which are produced twice yearly as part of the Office for Budget Responsibility forecast process.
At Spring Statement 2025 the OBR forecast that expenditure on Universal Credit is forecast to increase from £75.8billion in 2025/26 to £88.9billion in 2029/30 – with Universal Credit expenditure representing a similar share of GDP in 2029/30 as in 2025/26. The number of households on Universal Credit is forecast to increase from 6.3million in 2025/26 to 6.8million over that time period. The OBR will provide a further update as part of the Autumn Budget.
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