Areas Receiving More in Welfare
New research has highlighted major differences in welfare spending across England and Wales, with some areas receiving considerably more in benefits than workers in those areas pay through income tax and National Insurance.
The Adam Smith Institute’s latest Welfare Sustainability Tracker found that three-quarters of constituencies in England had welfare spending above the income tax and National Insurance paid by workers. England recorded around £1.25 in welfare spending for every £1 of income tax and National Insurance in the study.
Which Areas Stand Out?
The research found particularly high ratios in some major cities.
Birmingham recorded around £2.54 in welfare spending for every £1 of income tax and National Insurance. Liverpool recorded about £2.05, while Manchester was around £1.52.
London was different, with the study estimating around 78p of welfare spending for every £1 of income tax and National Insurance paid by workers.
Wales also recorded a high figure, at around £1.88 in welfare for every £1 of income tax and National Insurance in the research.
What Is Driving the Difference?
The figures include major benefits such as the State Pension, Pension Credit, Universal Credit, PIP and housing support.
The State Pension and Pension Credit together account for almost half of the welfare spending included in the ASI analysis, meaning the figures are not simply measuring unemployment benefits.
This is important because areas with larger older populations can naturally have higher pension-related spending.
The Map Needs Context
The figures should not be interpreted as saying that people in particular areas personally receive more benefits than they pay in tax.
The analysis compares area-level welfare spending with income tax and National Insurance paid by workers. It does not include every tax paid by households, such as VAT, council tax or other taxes.
Another independent benefits map using HMRC and DWP data also warns that comparisons can vary depending on which benefits and taxes are included.
What This Means
The latest figures show a clear geographical difference in welfare spending across Britain.
However, the headline numbers should be viewed as area-level comparisons rather than individual household calculations. The full map provides a way to see how different constituencies compare and which factors, including age and employment levels, may influence welfare spending.