Santander Chairman Links Soaring Benefits Bill to Weak Financial Literacy

William Vereker, chairman of Santander UK and former business envoy under Theresa May, has attributed the UK’s rising benefits bill and long-term worklessness to poor numeracy and a lack of financial education. Speaking amid a sharp increase in sickness benefit claims, Vereker stressed that many people fail to see the long-term benefits of work due to the immediate financial appeal of state aid.

Vereker explained that some individuals view work as less appealing because the immediate financial gain appears minimal compared to the security of benefits. “One of the challenges of worklessness is that people look at benefits and the job they can get and think, ‘I’m only making £5 or £10 extra a week—why bother?’” he said. “But, of course, the reason is that the following year you’ll make more, and then more again. You’ll create an opportunity for yourself.”

The businessman criticized the lack of practical financial education in UK schools, arguing that many young people are ill-prepared to make informed decisions about employment versus benefits. He pointed out that a lack of financial literacy often leads individuals to undervalue the long-term career opportunities that low-paying jobs can provide.

Vereker’s comments come as Labour leader Sir Keir Starmer and Chancellor Rachel Reeves work to address Britain’s soaring sickness benefits and a rising number of economically inactive adults. Over one in five working-age adults are currently not employed, with critics suggesting that generous welfare payments are encouraging dependency. Research from the Centre for Social Justice revealed that annual sickness benefits can exceed the income of a minimum-wage job by £3,000.

The number of long-term sickness claims has risen by 650,000 since the pandemic, reaching a total of 2.8 million, while a study by the Boston Consulting Group suggested that thousands of young people are entering unemployment directly from education. In response, ministers have launched reforms, including job centre changes and a “youth guarantee” program that aims to withhold benefits from those who refuse work or training. However, concrete measures to reduce sickness benefits are not expected until next year.

David Blunkett, former Home Secretary and current Labour peer, echoed the sentiment, stating: “We have an obligation to help people. We don’t have an obligation to help people if they’re not prepared to help themselves.”

As the UK faces increasing pressure to curb the benefits bill, there is growing debate over the role of education and incentives in addressing worklessness and financial dependency.