Nearly 900,000 people live in neighbourhoods where more than half of working-age residents claim out-of-work benefits, according to new research. The findings reveal sharp geographical inequalities across England and Wales, with some communities experiencing levels of benefit dependency far above the national average.
The analysis, published by the Centre for Social Justice (CSJ) on 11 October 2026, identifies 3,369 neighbourhoods with particularly high claimant rates. It comes amid growing concerns about economic inactivity, rising health-related benefit claims and the financial pressures facing Britain’s welfare system.
Thousands of Neighbourhoods Reveal the Scale of Britain’s Welfare Divide
According to the CSJ’s State of Dependency report, approximately 860,000 people live in areas where out-of-work benefit claimants outnumber half the estimated working-age population. These neighbourhoods typically contain around 250 residents, allowing researchers to identify inequalities that broader unemployment statistics may overlook.
The analysis also identified 18,971 neighbourhoods where claimant numbers exceed one-third of the working-age population. Together, these areas accommodate almost six million people. The geographical differences are substantial. Birmingham has the largest number of neighbourhoods exceeding the 50% threshold, with 166, followed by Liverpool with 112, Sheffield with 82 and Bradford with 81.
Blackpool presents a different picture when measured proportionally. Some 15% of its neighbourhoods exceed the threshold, compared with 12% in Hartlepool and 8% in Redcar and Cleveland.
Even neighbouring streets can produce markedly different results. In Bradford, two areas separated by approximately 300 metres recorded claimant rates of 26% and 83% respectively. According to the CSJ, around 22% of Liverpool‘s neighbourhoods have claimant numbers equivalent to at least 40% of working-age residents. Birmingham records 18%, compared with just 2% across London.
Researchers used March 2026 Department for Work and Pensions claimant statistics alongside mid-2024 population estimates from the Office for National Statistics. The figures therefore describe benefit receipt relative to estimated populations, rather than directly measuring unemployment.
Rising Health-Related Claims Place Growing Pressure on Welfare Spending
The research also highlights a changing pattern of economic inactivity, with long-term illness and disability increasingly prominent in Britain’s benefits system. According to the CSJ, the number of working-age people reporting mental health difficulties has increased by 3.2 million since 2012.
Since 2019, the number of working-age claimants facing no requirement to seek or prepare for employment has risen by almost 1.7 million. Over the same period, the incapacity benefit caseload increased by 61%, while reported disability prevalence among working-age adults rose by 16%.
Former Work and Pensions Secretary Sir Iain Duncan Smith, who chairs the CSJ’s Welfare 2030 inquiry, warned that substantial levels of worklessness were being overlooked. “Britain is now living with levels of worklessness that would once have been treated as a national emergency,” he said.
Financial pressures are also mounting. Working-age benefit expenditure is forecast to reach £136.1 billion in 2026/27, representing a £49.6 billion increase in real terms since 2019/20. Spending is projected to approach £150 billion by 2029/30, according to figures cited by the CSJ.
The organisation advocates changes to health-related benefits, alongside personalised employment support and investment in economically disadvantaged communities. Its full 250-page report is scheduled for publication on 13 October 2026, bringing further scrutiny to the relationship between ill health, employment opportunities and Britain’s welfare system.
