The average earner will see almost £2,000 of their taxes go towards Britain’s spiralling benefits bill this year, new analysis has found.
Workers paid the median salary nationwide will have more of their taxes spent on welfare – £1,970 – than any other item of public spending, as increasing numbers of people receive sickness benefits while Labour has abandoned proposed cuts.
Employees on wages of £39,039 will also contribute more than £1,000 towards the running of the National Health Service this year, according to a tax calculator developed by the Adam Smith Institute on the eve of the crucial Budget.
The think-tank estimates that another £659 of the average earner’s income tax and National Insurance contributions will go on debt interest payments, along with £593 on education, £354 on defence and £234 on transport.
Just £143 of their money will be sent to the Home Office – covering policing, asylum and the security services – including £15 that will go towards controversial asylum hotels.
Another £80 will go to the Ministry of Justice to keep courts and prisons going, while £83 will go on environmental levies and £40 will be earmarked for the delayed and over-budget High Speed 2 railway.
The think-tank says its tax calculator shows the damage caused by Rachel Reeves at her last Budget, calculated under the 2025-26 tax code for England, and will update it after her statement to show how government spending and the tax burden will change next year.
A calculator developed by the Adam Smith Institute think-tank shows workers how much of their taxes will be spent by the Government on welfare, the NHS and debt interest
Ministers abandoned plans to cut £5billion from the benefits bill in June after a backbench rebellion by Labour MPs
Jasper Ostle, head of research of the ASI, said: ‘The average worker is now handing over thousands a year just to fund Britain’s sprawling welfare system.
‘Our new tax calculator lays bare what Reeves won’t: taxpayers are footing ever-larger bills while government spending continues to spiral out of control. Borrowing is climbing, services aren’t improving, and households are being softened up for yet another punishing Budget.
‘If ministers want to restore trust, they must stop treating taxpayers like bottomless piggy banks and cut spending. The ASI will continue tracking where every pound is being spent.’
