Key points
- Smoking costs society in England £43.7bn a year through a combination of lost economic productivity and health and social care costs. This rises to £78.3bn if the cost of early deaths due to smoking is included.
- In 2024, smoking cost the public finances in England £16.5bn, more than double the £6.8bn raised through tobacco taxes.
- Investing £300m annually in tobacco control over the next five years (2025-2030) could generate an extra £4.8bn for public finances in England and create 57,100 jobs by 2030.
The profound and far-reaching impact of smoking on society and the economy means there are many ways to express the costs and quantify the impact. This page sets out the key costs and provides a short explanation of how these are assessed.
Total cost to society in England
ASH estimates smoking costs England £43.7bn annually (and £51.9bn across the UK). This includes:
- £27.6bn in lost productivity (early deaths, reduced employment, and lower earnings due to tobacco consumption)
- £1.82bn in healthcare costs
- £13.9bn in social care costs to the state and families
- £332m in smoking-related fires
These costs can be broken down by region, local authority, combined authority, parliamentary constituency, and ICB using the ASH Ready Reckoner. For more information see the Ready Reckoner methodology and the underlying economic modelling: CBPF Model of Smoking (V 2.3 January 2025).
Note: The £43.7bn cost to society doesn’t include the cost of early deaths due to smoking (£34.6bn) which is set out below.
Note: Previous ASH analysis has put the cost of smoking in England at £21.8 bn. This figure is based on the same analysis as the ASH Ready Reckoner but excludes some elements not used by the UK government in their modelling, specifically:
- The cost of informal and unmet care needs for those unable to secure local authority care
- Reduced Gross Value Added (GVA) due to expenditure on tobacco products compared to other goods and services
To view this analysis, select “Show costs, excluding GVA and informal & unmet social care, as used in DHSC modelling” in the Ready Reckoner.
Cost to the public finances in England
Smoking cost the public finances in England £16.5bn in 2024. After accounting for £6.8bn in tobacco tax revenue and £206m in reduced pension payments due to early deaths, the net loss was £9.7bn. This includes:
- £3.3bn in reduced tax revenue from lost productivity (£10.1bn before excise tax revenue is accounted for).
- £3.4bn in increased social security spending (£3.7bn before reduced pension payments are accounted for)
- £3bn in public service costs (healthcare, social care and fire services).
Note: These figures refer to things which have a direct cost to the public finances (e.g. reduced tax revenue). This is different to the overall costs of smoking to society which are significantly larger, but do not all directly impact the public finances.
Calculations by Landman Economics for ASH. See the CBPF Model of Smoking for the full methodology.
Benefits to public finances when smoking rates fall
Investing £300m annually on tobacco control from 2025-2030 could generate an additional £799m a year (£4.8bn overall) for the public finances in England, including:
- £372m increase in tax receipts (after deducting £728m in reduced tobacco excise).
- £277m decrease in social security spending (offset by £29m in increased pension costs).
- £150m reduction in public service costs (health, social care and fire services).
Improved economic productivity could create an extra 9,500 jobs annually, totalling 57,100 by 2030:
- 28,100 jobs from higher employment probability of non-smokers.
- 22,500 jobs from consumer spending shifting away from tobacco to other goods and services.
The higher employment probability of non-smokers is due to better health and wellbeing, longer healthy life expectancy, and higher productivity. The large employment impact of consumer spending switching out of tobacco is due to the high excise taxes, and lack of any domestic production of tobacco or cigarettes. This means that spending on tobacco has little or no impact on employment, unlike spending on other goods and services.
Calculations by Landman Economics for ASH. See the CBPF Model of Smoking for the full methodology.
Cost of early deaths due to smoking
Early deaths from smoking in England cost £34.6bn annually. This is calculated using the HM Treasury ‘green book’ QALY values, which assign a financial value to each year of life lost.
This figure is excluded from the overall cost of smoking to society figure, as the value of lives lost is a subjective measure rather than a direct financial cost. It is, however, a further way to assess the significant impact of smoking every year on people’s lives and capture the intrinsic value of lives lost to smoking, separate to tangible costs such as healthcare and productivity.
Calculations by Landman Economics for ASH. See the CBPF Model of Smoking for the full methodology.
Cost to people who smoke and their families
In 2024, people who smoke in England spent £12.1bn in total on tobacco, averaging 2,338 per smoker. This equates to 10% of the £23,338 average disposable income for England (gross disposable household income per head). Quitting smoking is one of the best things people who smoke can do to boost their income.
See the ASH Ready Reckoner for local estimates of tobacco spending.
Households with smokers face higher poverty rates. In 2018/19, 21% of smoking households in the UK lived below the poverty line, amounting to one million households. When tobacco expenditure was included in the assessment of poverty, this rose to 32% (1.5 million households), including:
- 1 million children.
- 2.2 million working-age adults.
- 400,000 pensioners.