Over half of UK population live in households that get more in benefits than

A record 35.8 million people live in a household receiving more in state handouts and services than they pay in tax, according to new figures laying bare the reality of benefits Britain.

The dismal figures show that households that were net recipients of taxpayer largesse – taking more from the state than they put in – represented more than half of the population.

And they underscore the significance of Labour’s failure to push through welfare reform – and the challenge facing new Work and Pensions Secretary Pat McFadden as he attempts to bring the benefits bill and Britain’s sicknote epidemic under control.

Experts warned it will get worse under Labour as high taxes lead to an exodus of wealth creators.

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Elliot Keck, head of campaigns at the TaxPayers’ Alliance, said: ‘For years the state has been overwhelmingly dependent on high earners to fund the services we all rely on.

‘This has created a situation where around half of the public put in less than they get out. Yet despite this precarious predicament, Rachel Reeves has devoted her time and efforts as chancellor into targeting successful taxpayers, forcing many to flee and putting unsustainable pressure on the public finances.

‘Labour now needs to urgently back off and look at significant tax cuts to encourage the entrepreneurs, investors and business people back to our shores.’

The ONS data showed that for the year ending in March 2024, 35.8 million people lived in households receiving more benefits than they paid in tax – a record outside the pandemic when the figure rose to 36.5 million.

It represents 53.3 per cent of the population, up sharply from 52.6 per cent the year before.

The figures illustrate a grim trend as the proportion of the population dependent on benefits has steadily risen – from around 40 per cent in the 1980s to around 50 per cent at the time of the financial crisis in 2009.

It has barely fallen below that level since and spiked further to 55 per cent in 2020/21 during Covid – since then coming down a little but still remaining well above pre-pandemic levels.

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The figures are likely to raise further concerns about the unsustainable nature of state spending.

Critics warn that as Britain’s tax burden climbs to the highest level since the 1940s, successive governments have failed to get a grip on wastefulness.

The ONS figures measure the gap between sums received by households in benefits – including NHS services and education as well as welfare handouts – and those they contribute in taxes.

It comes after a warning from the British Chambers of Commerce (BCC), a business lobby group, that Britain’s sicknote epidemic must be tackled as it is ‘hobbling’ growth.

The BCC labelled Britain ‘the sick man of the G7’ with around 7 per cent of the workforce out of work due to long-term sickness – higher than any other country in the group of advanced economies and twice the level of 3.5 per cent in Japan.

Earlier this year, an attempt by the government to reform the welfare bill was scuppered by Left-wing Labour backbenchers – adding to the headache facing the Chancellor as she seeks to fill in a black hole estimated at around £20-30billion by most economists ahead of November’s Budget. 

Figures this week showed a record number of people are claiming disability benefits for anxiety and mood disorders.

Research by the Centre for Social Justice think-tank showed almost 650,000 were claiming Personal Independence Payments (PIPs) for those two conditions in July.

And 250 a day have been added to the total since Labour came to power.