Just to maintain current service levels, UK health spending will need to increase by £95bn by 2033/34, rising from 7.3% of national income this year to 8.9% of national income – increases of 3.3% a year.
But if the government wishes to improve NHS services, including meeting waiting times targets and addressing under-provision in mental health services, increases of approximately 4% a year will be needed.
Some catch-up money will be needed over the next five years to maintain services and address the backlog of funding problems. This will require funding to grow by 5% a year, before falling back to levels closer to the historic trend of 3.7%.
Meeting these pressures will almost certainly require tax increases, as cuts in spending on other services are unsustainable following eight years of austerity.

The Institute for Fiscal Studies and the Health Foundation have undertaken research to look at how much health spending would need to rise to provide the level of service it does today and how much it would need to modernise and improve for the future.

These findings are the result of careful ‘bottom-up’ modelling of supply and demand factors in the health and social care sectors including demographic change, population health and cost data. The research was carried out by researchers from the Health Foundation and the Institute for Fiscal Studies, in association with the NHS Confederation.

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Download the report from the IFS website

Securing the future: funding health and social care to the 2030s Cost pressures on the NHS are set to grow: a long-term funding solution is needed, likely through tax increases

Key findings

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Further reading

A fork in the road: Next steps for social care funding reform

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