Guide to the UK Welfare State

The UK Welfare State is designed to help British families that fall upon hard times. If you are struggling to cope with your financial situation, learn more about what you are entitled to and how to claim your benefits.


The purpose of this guide to the welfare system in the UK is to be both practical and informative. You will find information about how the present benefits system works in the UK but also statistical data.

Benefit System

The structure of this guide is as follows: Firstly, this guide begins with two general chapters: one about the history of welfare in the UK and the next about a consideration of the welfare state as an entity. Next, it continues with chapters about the different benefits which are available for various sectors of society. Afterwards, we then concentrate on both recent and future welfare reform. Finally, the guide concludes by focusing on two specific aspects of welfare: its effects and the impact of illegal immigrants.

Table of Contents
Ch. 1: The Fascinating History of Welfare Reform in the UK
Ch. 2 Part I: Are Benefits UK The Best in the World?
Ch. 2 Part II: Is the UK The Best Welfare Country In The World?
Ch. 3 Part I: Child Benefit and Tax Credits
Ch. 3 Part II: Childcare Benefits and Free Childcare
Ch. 4 Guide to Job Seeker’s Allowance
Ch. 5 Part I: Guide to all benefits for the disabled
Ch. 5 Part II: Guide to all benefits for the disabled
Ch. 6: Winter Fuel Payment and Other Benefits for Heating Expenses
Ch. 7: Council Tax Benefits and Other Help From Your Local Council
Ch. 8: Full Guide to Housing Benefit
Ch. 9 Part I: Universal Credit – What it is and how to apply
Ch. 10: Welfare Reform and the Benefit Cap
Ch. 11 Part I: Welfare Changes for Pensioners
Ch. 11 Part II: Welfare Changes for Pensioners
Ch. 12 Part I: The Reality of Living on Welfare
Ch. 12 Part II: The Reality of Living on Welfare
Ch. 13: Are Illegal Immigrants a Burden to the Welfare System?

Chapter 1: Beveridge Report – The End of His Vision?

There are constant criticisms and complaints about the state of welfare provision and its increasing costs. The Beveridge report was written in the different reality of a Britain at war in 1942. Now, we are dealing with a vastly different UK society, which he could never have foreseen. Maybe the dream which inspired Beveridge is not possible anymore.


Read more about the Beveridge Report and how it fitted into a long history of UK welfare provision. Did you know that the groundwork for the Beveridge Report was laid by the Liberal Government’s welfare reforms (1906-14)?

Scroll through our fascinating infographic depicting the changing developments in welfare in the UK over the last 500 years.


Beveridge Report in Context

It is interesting to notice how the provision of aid to the poor runs in tandem with people’s attitudes to the unemployed themselves. The early part of the 19th century was a time of economic crises and high unemployment. These problems were caused in part by the effects of the Napoleonic wars, the re-establishment of the gold standard and the increasing mechanisation of agriculture.

Hence, this society gave birth to the Poor Law Amendment Act (1834). This Act intended to make the workhouses as degrading and humiliating as possible to encourage the destitute to get a job. The poor were blamed for their own situation, and were accused of being idle, ignorant and dishonest. Does this attitude remind you of anything?

Chapter 2: Is the UK a Welfare State?

Welfare State Definition

The first thing is to define what a welfare state is. The UK welfare state is a ‘safety net’ in place to take care of the most vulnerable members of the society when they are in need.


Welfare Statistics

How much does the UK spend on the Welfare State? Where do the majority of claimants live? We analyse statistics of unemployment rates across the UK. Is there still a divide between the affluent south and struggling areas of the north? In Northern England, Scotland, Wales and N. Ireland, is there still a higher reliance on short term loans for bad credit, caused by higher unemployment? From a comparison of different regions in the UK, we then compare the provision of welfare in the UK to the systems in other countries.

Is the Welfare State the Envy of the World?

It is sometimes assumed that the UK is envy of the rest of the world, but in reality, is this true? Is its system ‘the most generous in the world’? You might find the survey results an eye-opener. We will detail the differences and analyse what other factors have to be taken into account when comparing the welfare in different countries.


Viable Alternatives to the Welfare State

Cynics have been predicting the imminent demise of the welfare state since its start in the 1940s. However, are there any viable alternatives to the welfare state? Most of all, will these alternatives still protect the unemployed, poor, sick, disabled and old from taking wage day loans to help get through the month? For every option which has been suggested, we list their pros and cons so that you can judge for yourselves. It is telling in itself that there are so few. When reading through the alternatives which have been put forward or have been used successfully in other countries, you must ask yourself: would this system work, given the realities of what society is like in the UK? After all, welfare is a reflection of the values of the society and of the time in which it was born.

Benefit UK

In Chapters 3-6, you will find practical information about how the benefits system presently works in the UK. Who is eligible, how do you make a claim, how much will you receive? How often will you receive money? We will also discuss what you need to be careful about so that you do not end up losing financial aid to which you are entitled.

To make things easier, each chapter has been devoted to a different sector of society. If you are looking for information about a specific benefit, then you might find the following list helpful:

Chapter 3: Childcare benefit, working tax credits and child tax credits.

All 3 to 4-year-olds in England can get 15 hours a week of free child care. As a matter of fact, some two-year-olds can also. Read more about this in Chapter 3. There is also a full explanation of how the system of Tax Credits works and who is eligible for Working Tax Credit and Child Tax Credit.


Chapter 4: Unemployment Benefit

Did you recently lose your job? The welfare state is designed for people in your situation. Hard working people, who fall upon hard times. You paid all that tax while you were working, now is the time to get something back for it. Read up about what benefits for unemployed people in Chapter 4. You can also find information about help for the disabled who are looking for work.

Chapter 5 & 6: Disabled Benefit

This chapter concentrates on benefits for the more severely disabled and/or old and considers the Carer’s Allowance. In Chapter 6 we look at other benefits to help with both care and heating costs.


Chapter 7 & 8: Help from Elsewhere: Councils & Other Agencies

Did you know that central government (Department for Work and Pensions) is not the only one who can help you when you are living on benefits? In Chapter 7, we look at the role of your local council. You might be eligible for Council Tax Support, council-operated Social Services, reduced transport costs on local buses. Disabilities Grants and help with the purchase of school uniforms. In Chpater 8 we discuss everything you need to know about Housing Benefit. Did you know that you might be eligible for less well-known allowances such as Discretionary Housing Benefit, Extended Payment of Housing Benefit and In-Work Housing Benefit?


It is said that education is the key to escaping dependence on benefits. As a result, we also consider other agencies where you can get grants and bursaries. These forms of finance can help to complete or continue your education so you have more chances of competing on the job market. Turn to Chapter 7 to see if you are entitled to help, whether you are a young student or mature learner.


Welfare Reform

To be fully efficient and in order to serve the best interests of its citizens, a welfare state should never remain static but must adapt to take into account the changing realities of society. For this reason, welfare reform is inevitable. Chapters 7 and 8 look at the welfare reforms introduced since 2012 (some of which are still in a stage of transition).

Chapter 9: Universal Credit

The 3 most controversial recent changes to the welfare system are, without a doubt, the Reduction in the Spare Room Subsidy (also known as the Bedroom Tax), Universal Credit and the benefit cap. The government had intended these reforms to cut state expenditure on benefits and encourage those on benefits to find employment.

How far have they achieved their aims and who are the people who have been most affected by this welfare reform? Chapter 9 talks more about Universal Credit. Read there for answers to these questions as well as practical information for claimants of these benefits.


Welfare Benefits

Everyone knows that living on benefits will inevitably mean being deprived of material possessions. When politicians or people in the media talk about how they could quite easily survive on benefits, they are missing the whole point of what it means to have to rely on a low income. The problem is not getting by for a month or two on £70 per week. The point is that when you are trapped in such a situation, any unexpected expense is a major catastrophe. Regrettably, a low income does not give you the chance to put money aside. So, if your child needs new trainers or the cooker needs fixing, then these become major catastrophes.



In many cases such as these, people turn to emergency loans such as payday loans. These short term loans are often easier to access and provide the money in a faster, more efficient way. However, the key point is that easy payday loans are also the more expensive option. At a difficult time, such as during unemployment, it is crucial to try and save money. Paradoxically, many people still find themselves heading towards the online loan option.

But, in such a situation when you are desperate, did you know that you could apply for an interest-free Budgeting Advance of £100-£812 from your local JobCentre Plus? Read all about this in Chapter 9 Part II.


Chapter 11: Changes in the Pension System (2018-28)

The other major piece of legislation to affect citizens in the UK, both in the short and the long-term, has been the gradual changes affecting pensioners. Firstly, the State Retirement Age gradually being raised to 67 for both men and women. Moreover, the whole state pension system is being overhauled. What are the reasons for these changes and what does the new system of pension auto-enrolment mean for the average working person?


In Chapter 11 you will read a practical guide to the pre-existing pension scheme in the UK as well as an explanation of the new system to be introduced by 2018. Furthermore, you will find information about other financial aid available for people struggling on a low pension such as emergency help from local authorities, state budgeting loans and bereavement benefits.

Budgeting help is also available from the Money Manager Tool from the Money Advice Service, Citizens Advice, the Money Advice Trust, the Money Charity or your JobCentre work coach.

Chapter 12: The Practicalities of Life on Benefits
The Hidden Costs of Being on Welfare

Lacking the ‘good things in life’ is not the worst of your problems when you are on surviving on benefits. What other effects does relying on benefits have for claimants? Unfortunately, we have all heard the terms: ‘benefit scroungers’, ‘benefit scum’, ‘skivers’, etc. In Chapter 12, we look at the way this misconception affects society itself, the claimant and their self-image as well as the impact on their families, especially their children. What other hidden costs does living on benefits have for children and how can it have an impact on their health, life expectancy, education and social skills?



We consider the reality of living on welfare as far as the practicalities of life are concerned. For example, finding accommodation, shopping and paying for energy bills. We compare the advantages and disadvantages of renting social housing or renting privately before looking at other issues which arise. Why is there such a shortage of social housing and why are private landlords so reluctant to rent to people on benefits

Reduction in Bedroom Tax

The impact of the Reduction in the Spare Room Subsidy (Bedroom Tax) will be analysed in depth. Firstly, we will discuss how people are coping with the loss of income? Have they downsized to reduce waiting lists for social housing and reduce overcrowding? Do they simply rely on small loans to help pay their rent? Or, have they been ‘pushed’ into finding a job? Finally, what other help is available for these people? How much has the use of food banks increased since the introduction of the Welfare Reform Act of 2012?

Unfortunately, the UK has always had a deprived ‘underclass’. How much has that changed over the past 20 years and how many people and children now live on or under the poverty line? You will be surprised by the changes in the patterns of poverty in the UK.


Chapter 13: Illegal Immigrants & Welfare in the UK

Finally, in Chapter 13, we turn our attention to the problem of illegal immigrants in the UK. How many illegal immigrants are living in the UK at the moment and are they really attracted by the generous provision of benefits here? We also consider the aid given to asylum seekers and the role of the EU. Are we really being ‘forced’ to take in a quota of asylum seekers. Furthermore, are refugees exploiting the ease of movement between member states to initially settle in another EU country and then later move to the UK because of our welfare system? Finally, how much is the presence of illegal immigrants placing a further burden on the ailing National Health Service?



Written by: Becky Hall
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