Estimating the savings and financial benefits to the UK government of return-to-work for people in receipt of Universal Credit

Over 5 million people in the UK are out of work and in receipt of Universal Credit including almost a million young people aged 18-24 years who are not in education, employment or training (NEETs). Ill-health related economic inactivity accounts for over 3 million claims and is particularly concentrated in the most deprived and deindustrialised constituencies.

The UK government has therefore introduced several return-to-work programmes as part of its desire to ‘Get Britain Working’. However, it is not known how effective such measures will be and what savings they might generate for the government. So, the Department for Work and Pensions (DWP) Select Committee commissioned this analysis.

We used UKMOD to estimate the potential welfare bill saving and tax receipts that would accrue to the government during this parliament (to 2029) if 5% of under- and over- 25s (both those unemployed and those economically inactive due to sickness or disability) returned to work in 2026. The 5% is a conservative estimate based on the lower effect size found in DWP evaluations of previous, similar, cost-effective return-to-work initiatives in the UK in the 2000s, which provided additional support to certain groups who were not in employment.