Rise revealed by Conservative analysis will provoke calls for overhaul of £155bn benefits budget
Daily Telegraph 03/05/26
More than 600,000 households received more in benefits than the average worker’s salary, the first analysis of its kind has revealed.
The figures show that 625,618 households were each given more than £32,200 in welfare payouts last year – the average annual salary of a British worker after tax – despite the introduction of a benefits cap.
The analysis, by the Conservatives, also revealed that 16,000 of those households received more than £60,000 in welfare payments – almost twice the average annual take-home pay.
The figures will provoke calls for an overhaul of the £155bn benefits budget and for reform of the welfare cap to ensure that “work always pays”.
Sir Keir Starmer is under pressure to cut welfare spending in order to bolster Britain’s defence budget, with Labour preparing to unveil its defence investment plan “within weeks”.
Neil O’Brien, the shadow minister for policy development, who conducted the analysis, said: “The real-terms growth and scale of really large benefit claims from working-age households make the case for a return to welfare reform stronger.
“We need reforms across all types of benefit – and particularly the household benefit cap, which is no longer really constraining the growth of really large claims.
“Some households are getting a lot more in benefits than the average person gets to take home after working full-time. We need a system that’s fair to taxpayers as well as those benefiting from it.”
Labour, however, maintained that households receiving this level of support had the “highest level of need”, with one or more family members suffering severe disability.
The Tory analysis suggests that the number of working-age households receiving more than £30,000 a year in benefits has climbed by more than a third to 800,000 since the Department for Work and Pensions started using administrative data on incomes people actually receive instead of relying on asking them in surveys.
Of those, some 667,278 households took more than the average salary of £32,200 a year in 2023-24 – a record high and up 30 per cent on the previous year. The number dropped to 625,618 in 2024-25, but was still double the 392,000 in 2019-20.
The 600,000-plus families accounted for one in 30 of all households in Britain. Of those, 267,000 received more than £40,000 a year, 91,000 were paid more than £50,000 and 16,289 received more than £60,000 a year in 2024-25 – an 8.5 per cent increase on the previous year.
The benefit cap, introduced in 2013 by George Osborne, the then Tory chancellor, was designed to limit the maximum amount of benefits that a working-age household can receive, to encourage people into work.
But if the household includes one adult in receipt of disability benefit, even if there are other adults in the family who are fully able to work, they all avoid the benefit limit.
The Tories are proposing to close this loophole, which allows uncapped benefits for a whole household if just one adult is eligible for the Personal Independence Payment (Pip).
They would require all adults who were able to work to be employed for at least 16 hours a week and face a cap if they were not.
Helen Whately, the shadow work and pensions secretary, said: “The household benefit cap means you can opt out of work and still get thousands of pounds of extra benefits.
“We will make the cap do what it’s supposed to do – make sure work always pays. Welfare should be a safety net, not a lifestyle choice.”
The Department of Work and Pensions said Mr O’Brien’s figures were an overestimation.
A government spokesman said: “The 2 per cent of households receiving this level of support have the highest needs, and require extra support.
“The benefit cap exempts households where one or more residents have a severe disability requiring extra support and are among the most vulnerable in our society, and it is right that they receive it.”
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