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Getting 5% of people on universal credit back to work could save Government £20bn, data reveals

Researchers from the University of Manchester, Newcastle and Glasgow found that getting 5% of unemployed under-25s back to work would save £903m.

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Government schemes could save over £20bn and support more than 220,000 people back into work if just 5% of those on Universal Credit return to employment by 2029, according to analysis by researchers from the University of Manchester, Newcastle and Glasgow. 

The report modelled the Government’s ‘Getting Britain Working’ initiatives and found that savings would come from lower benefit spending and higher tax revenue. 

Costs to the Government for these schemes could be between £1.5bn and £1.9bn, with every £1 spent returning between £5.21 and £6.63. 

Researchers found that getting 5% of unemployed under-25s back to work would save £903m, while the same percentage of under-25s on health benefits would save £631m. 

Among over-25s, 5% returning to work would save £6.67bn, and those on health benefits would save £11.9bn.

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Debbie Abrahams, MP for Oldham East and Saddleworth and chair of the Work and Pensions Select Committee, said: “After more than a decade of austerity-driven policies – further compounded by the COVID-19 pandemic – levels of ill health and health inequalities have deteriorated across the UK, but particularly especially in deprived areas. 

“As a result, the country now faces significantly higher rates of economic inactivity due to ill health compared with similar economies such as Germany, Sweden, and France. 

“This poses a major economic challenge, contributing to stagnant growth, widening productivity gaps, and increasing poverty and health inequalities.”

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Abrahams added: “In the past we have seen the value of supportive welfare-to-work programmes, such as the New Deal for Disabled People and New Deal for Young People, which addressed the needs of the whole person in helping them to get into work. 

“It’s imperative that these Government ‘Trailblazer’ schemes are ramped up – if we can get even a small proportion of the out-of-work population working again, we will see extraordinary gains, not only fiscally, but for these individuals, their families and across communities, workplaces, and public services alike.”

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Professor Clare Bambra, academic co-director of Health Equity North and professor of public health at Newcastle University, said: “Constituencies such as East Marsh and Port, Grimsby, Central Easterhouse, Glasgow and Birkenhead Central have around 30% of the working-age population receiving ill health-related welfare benefits. 

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“In these areas, life expectancy is 12 years less than the national average. 

“This stark inequality reflects the deep connections between health, work, and place – where decades of industrial decline and underinvestment have left communities struggling with poor health, limited opportunities, and persistent economic disadvantage.”

Bambra added: “By embedding employment support within health services and targeting investment where ill health and unemployment overlap, we have a real opportunity to break this cycle. 

“Helping even a small proportion of people in these areas back into good, secure work could have transformative effects – not just for the government and local economies, but for people’s health, wellbeing, and prosperity.”

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Dr Luke Munford, academic co-director of Health Equity North and senior lecturer in health economics at the University of Manchester, said: “When people are supported to stay healthy, skilled, and connected to good jobs, everyone benefits – be it individuals, families, businesses or the economy as a whole. 

“This report highlights the value of investing in people’s health and employability. 

“Even modest improvements in getting people back into the workplace could deliver billions in savings by the end of the decade.”

Munford added: “These findings show that the Government’s efforts to integrate and embed health and employment can be a huge step towards the economic recovery of the UK.”

Dr Andy Baxter, research associate at the University of Glasgow, said: “Employment is one of the strongest determinants of health. 

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“When people are in good, secure work, they’re less likely to experience long-term illness, more likely to engage with preventive healthcare, and more connected to their communities. 

“Reducing economic inactivity through health-focused employment programmes provides stability, purpose, and the foundation for healthier, fairer futures.”

Baxter added: “Effective back-to-work schemes are crucial in rebuilding a Britain that is healthy and prosperous, and our research shows that the return on investment potential is huge.”

Hannah Davies, executive director of Health Equity North, said: “We’ve seen in the past that well-designed back-to-work schemes can transform lives and deliver real results for both people and the economy. 

“But this time, it needs to be right from the very start – ensuring programmes are properly funded, evidence-based, and tailored to the needs of local communities. 

“If the Government can combine effective employment support with investment in health, skills, and opportunity, they have a genuine chance to break the cycle of long-term unemployment and ill health once and for all.”

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