Supplementary forecast information release Upward revisions to welfare spending since March Summary

1.3 Two main factors explain the upward revisions to welfare spending in the medium term: higher uprating of almost all pensioner and working-age benefits (thanks largely to higher inflation in the near term) and higher spending on health- and disability-related benefits 1 (reflecting in particular higher-than-expected inflows in recent months). [...] But for pensioner benefits, the vast majority of which is spending on the state pension and subject to the triple lock, the 2.5 per cent floor on uprating kicks in, leaving the overall revision relative to March little changed between 2024-25 and 2026-27. [...] Our forecasts have factored in assumptions about higher caseloads in the aftermath of the pandemic on the assumption that a health crisis would result in more people being eligible, while also reflecting catch-up demand following the disruption to the processing of claims while public health measures were in place. [...] 1.10 The result of our updated judgements about trends in health-related UC caseloads and the working-age PIP caseload has been to assume a continuously rising path for caseload prevalence over the forecast period for what we described in the EFO as ‘health-related and disability benefits’. [...] And we have revised up state pension spending in 4 This figure is smaller than the 0.6 million rise in the UC caseload across the NWRR, WFI and WP conditionality groups that was the basis for the figures used in the EFO.