Out-of-work benefits

What does this chart show?

This graph shows the proportion of the working-age adults claiming an out-of-work benefit in London and the rest of England. This is based on their ‘client group’, and the main reason why they are claiming a benefit. This includes jobseekers, Employment Support Allowance and incapacity benefits claimants, lone parents and others on income-related benefits (for example carer’s allowance) and is shown by the lines on the graph. The bars show the proportion of the working-age population that are claiming one of the four main out-of-work benefits for London only. Universal Credit (UC) will replace all of the benefits shown when it is fully rolled out, a process expected to be complete by 2022. It has been included in the graph for 2015 and 2016 only, as before then the numbers of people who had been transferred onto UC were extremely small. 

In 2016, 470,000 people in London were claiming an out-of-work benefit. This has been falling since the post-recession peak of 690,000 in 2009. This fall has been faster in London than in the rest of England. The fall has been faster for JSA and ESA compared with England but the fastest fall has been among those receiving a lone parent benefit. While the number of unemployed is falling in London as seen in Chapter 7 Work, the fall in the number of JSA or UC claimants is even faster. Between 2010 and 2012 on average 56% of those who were unemployed in England were claiming JSA or UC. In 2016 only 41% of those who were unemployed were claiming JSA or UC.* This suggests the gap between benefit receipt and need is widening. 

In 2016 the proportion of working-age people claiming an out-of-work benefit was 8.0% in London and 8.9% in the rest of England. Throughout the 2000s the proportion of people claiming an out-of-work benefit was higher in London than in the rest of England, and began closing around the time of the recession. 

Employment and Support Allowance and other incapacity benefits are the most common type of out-of-work benefit in London, claimed by 290,000 people in 2016 who were unable to work through disability or ill-health. This is the first time the number of people claiming ESA or equivalent has fallen below 300,000 since 2000. 

The next largest group are JSA claimants at 74,000. Jobseeker’s Allowance accounted for most of the overall increase in out-of-work benefit claimants during the recession and the subsequent fall. The proportion of people claiming JSA is now 1.2%: its lowest level on record. This is in large part because JSA claimants are being moved onto Universal Credit as it is rolled out across London. In 2016 there were 41,000 people claiming UC who were not in work. The proportion of people claiming UC and JSA is 1.9% which is still lower than in any other year apart from 2015 when it was 1.7%. 

A large fall can also be seen in the number of lone parent claimants, which more than halved between 2009 and 2016, from 130,000 to 59,000. This fall is, however, at least in part due to a change in eligibility. Lone parents are now required to seek work and claim JSA when their children are younger than was previously the case.

* The 2014 to 2016 average is 43%.

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