The recent history and future prospects of the UK welfare state

Nick Pearce and Gavin Kelly

Oxford Review of Economic Policy, 2025, vol. 41, issue 1, 28-40

Abstract: This article examines how the UK welfare state was significantly retrenched, reshaped, and selectively expanded in the era of austerity and Covid. It charts reforms to childcare, working age welfare, and pensions, relating these to changing electoral coalitions, the ideas and agency of political actors, and the challenges thrown up by the financial crisis, the pandemic, and the cost-of-living crisis. Distinct phases of welfare reform can be discerned, related to shifting coalitions of political support and the impact of socio-economic shocks. We situate our political-economic analysis within the institutional context of both the liberal welfare state and the ‘growth regime’ of the UK economy, demonstrating that the different phases of reform were—with the notable exception of the Covid furlough scheme—consistent with, rather than orthogonal to, the UK’s liberal institutional model. We conclude our account by examining contemporary challenges to the welfare state and potential pathways to reform in the decade ahead.

Keywords: welfare state; social security; disability benefits; social investment; pensions (search for similar items in EconPapers)
Date: 2025
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