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Official statistics show that around 1.8 million adults in the UK are currently classed as unemployed, representing just over five per cent of the working-age population. By historical standards, this appears relatively modest, especially compared with the 1980s and 1990s, when unemployment regularly exceeded three million and inspired UB40’s famous reference to the “one in 10” without work.
However, headline unemployment figures have always masked deeper problems — and today they are arguably more misleading than ever.
A broader and increasingly troubling measure of worklessness has now reached a record high. Data from the Department for Work and Pensions (DWP) shows that more than 6.5 million people are currently receiving out-of-work benefits, the highest number ever recorded. This total exceeds the combined populations of several major UK cities and has risen by around half a million since Labour took office just over a year ago.
This group includes people actively seeking employment, large numbers of unpaid carers, and a growing cohort of individuals deemed unfit for work due to health conditions. It is this latter category — largely supported through Universal Credit and Employment and Support Allowance — that is causing particular concern within government and among financial markets.
The share of working-age adults claiming sickness-related benefits, including those receiving Personal Independence Payment (PIP) while in work, has now surpassed the symbolic “one in ten” level highlighted in the early 1980s. The figure has climbed from 7.7 per cent in 2019 to 11.4 per cent at the start of this year.
Public spending has increased even more sharply. Welfare costs rose from £69.5 billion in 2020/21 during the pandemic to £92.8 billion last year, and are forecast to reach £108.6 billion by 2030, the end of the current parliamentary term.
Prime Minister Sir Keir Starmer, Chancellor Rachel Reeves, and Work and Pensions Secretary Liz Kendall are acutely aware that these trends must be halted — and ideally reversed.
Yet efforts to rein in spending suffered a setback in July, when a large backbench revolt forced the government to dilute its first major welfare reform package. As a result, most of the planned £5 billion in savings from changes to Universal Credit and PIP were abandoned.
