The Government is underestimating the number of Brits on sickness benefits by more than a quarter of a million people, according to a leading think tank.

Chancellor Rachel Reeves faces a £2billion welfare 'black hole' because officials have consistently underestimated the huge rise in people claiming incapacity benefits, the Centre for Social Justice said.

The think tank said its analysis of Department for Work and Pensions projections over a ten-year period found officials underestimated future claimant numbers by an average of 255,000.

There are now more than 9.25 million economically inactive — those not in work and not looking for a job — working age adults in Britain, highlighting the scale of the nation's sicknote culture.

Of this figure, more than three million are claiming incapacity benefits — up by 800,000 since the pandemic — and this is expected to hit 3.8 million by the end of this parliament.

CSJ said that if the average underestimate of 255,000 is added to the current forecasts, the number of people claiming sickness benefits could exceed four million by the end of this parliament.

This would see more than a million additional people claiming incapacity benefits compared to today, at a total cost to the treasury of £33.5billion by 2029.

There would be 'thousands more people consigned to a life on benefits' if this is allowed to continue unabated, researchers warned. 

The CSJ is calling on the chancellor to take urgent action to get economically inactive Brits back to work.

Andy Cook, the think tank's chief executive, said: 'These are deeply worrying findings. 

As if the challenge of economic inactivity wasn't tough enough already, our analysis suggests there are thousands more claimants slipping through the cracks.

'This must trigger a radical response this Budget — not only to get control of the spiralling welfare bill and fix the foundations of our economy, but to avoid wasting the potential of thousands of people who could be thriving in work.'

Rachel Reeves is expected to use her budget to pledge £240million for local back-to-work services, stating that she wants to 'build a Britain where people who can work, will work'.

However the chancellor is under pressure deal with the 'ballooning' welfare bill caused by the surge in long-term sickness, which is putting public finances under pressure and stifling economic growth.

Work and pensions secretary Liz Kendall is expected to proceed with measures planned under the Tories that will see a £1.6billion crackdown on fraudulent claims and a cut to welfare payments to some people with mobility and mental health problems.

In a speech on Monday, Sir Keir Starmer pledged that the budget would 'pave the way for reforms that tackle the root causes of economic inactivity'. 

He added that the extra cash would 'provide local services that can help people back into work, and the dignity it brings'.

The Department for Work and Pensions was contacted for comment.