New data reveals pensioner disability payments could hit £10 billion 

The report, conducted by LCP consultancy, highlights a significant increase in people seeking assistance for ill health over the past decade and predicts a potential rise of another million claimants over the next four years.

The findings emphasise the importance of early medical intervention and disability accommodations to facilitate a return to work to prevent a potential "retirement disability benefit timebomb. It argues that the longer people remain on benefits, the more challenging it becomes to remove them.

While work-related benefits typically cease once a person reaches retirement age, disability payments such as Personal Independence Payment (PIP) continue to be provided for as long as the recipient requires them.

The LCP report reveals that there are currently nearly 100,000 people aged 66—the state pension age—who are also receiving PIP or its predecessor, Disability Living Allowance (DLA). On average, these individuals are expected to continue claiming for an additional 11 years, receiving around £70,000 each. Half of these pensioners will continue to claim these benefits until their passing.

Sir Steve Webb, a former pensions minister who now partners with LCP, expressed concern about the open-ended nature of disability claims post-retirement age. He stressed the need for preventative measures, stating that the current political focus on getting individuals back to work may not adequately address the financial implications of prolonged disability claims.

The report suggests that the number of pensioners receiving disability benefits could surge by 60% over the next decade, from approximately 1 million today to 1.6 million in 2033. This potential increase could raise the taxpayer’s bill for these benefits from £6 billion to £10.5 billion.

As of now, the annual bill for Personal Independence Payment stands at £21.8 billion, supporting 3.2 million individuals.