Taxpayers could be hit with a £10billion benefits bill caused by pensioners claiming disability payments until they die, a new report warns today.
The number of people claiming handouts for ill health has risen by a million in the past decade, but could rise by another million in just the next four, according to the LCP consultancy.
While work-based benefits automatically cease when someone reaches retirement age, disability payments like Personal Independence Payments (PIP) continue for as long as the recipient needs them.
The LCP report said there are just under 100,000 people aged 66 – the state pension age – who are also claiming PIP or its predecessor benefit, Disability Living Allowance (DLA).
On average they are likely to continue to claim for another 11 years, obtaining £70,000 each, and half will continue to claim until they die.
It urged early medical intervention to help people return to work and avoid a ‘retirement disability benefit timebomb’, warning that the longer people are on benefits the harder it is to remove them.
Sir Steve Webb, the former pensions minister who is now a partner at LCP, said: ‘When you get a surge of working-age claims, which is what we’ve had, suddenly the open-ended nature of these claims becomes more significant.
The number of people claiming handouts for ill health has risen by a million in the past decade, but could rise by another million in just the next four, according to the LCP consultancy
It urged early medical intervention to help people return to work and avoid a ‘retirement disability benefit timebomb’, warning that the longer people are on benefits the harder it is to remove them
‘The political narrative is all about “let’s get them back to work”, whereas the issue is if you don’t do something preventative you’ve got an 11-year bill post-pension age.
‘That is such a large amount that it brings in all sorts of preventative measures that may not be cheap but may still be good value.’
It suggest the number of pensioners on disability benefits could increase 60 per cent in the next decade, from roughly 1million now to 1.6million in 2033.
That could see the bill for the benefit to the taxpayer rising from £6billion to £10.5billion.
The total current PIP bill is £21.8billion per year, paid to 3.2million people.
