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Nearly two billion people in low- and middle-income countries (LIC and MIC) were without adequate social protection as of 2022, according to a new report released April 7, 2025.
Around 1.6 billion of them received no social protection at all, while the rest lived in poor households, where benefits were too limited to lift them out of poverty or shield them from shocks like economic crises, climate change, conflicts or long-term economic and life cycle transitions, revealed World Bank in the report the State of Social Protection Report 2025.
In LICs, more than 80 per cent of the population either lacks access to or is inadequately covered by social protection systems. In lower-middle-income countries (LMIC), over 30 per cent of individuals are impacted by this gap, the report stated.
These figures underscored the urgent need for targeted reforms and investments to ensure that no one is left behind in the global push for inclusive development. “These gaps undermine poverty reduction efforts and deepen inequality,” the report warned, calling for urgent reforms and investments to strengthen social protection systems.
The report indicated that the proportion of a country's population not covered by its social protection system is closely linked to its economic development level.
LICs were found to be lagging in offering basic social protection. On average, almost 80 per cent of individuals in these nations receive no assistance, with an additional 3 per cent getting insufficient aid to make an impact.
Conversely, upper-middle-income countries performed better, with only 11 per cent of people entirely excluded and 6 per cent receiving inadequate support.
However, in absolute terms, the crisis is larger in MICs. Since these countries have bigger populations, the number of people without help is even higher — 1.2 billion in MICs, compared to 500 million in low-income nations.
Sub-Saharan Africa faced the biggest challenge. More than 70 per cent of people there have no access to any form of social protection, and only a small portion receive limited aid.
Globally, 88 per cent of people living in extreme poverty lacked either adequate or any social protection. In LICs and sub-Saharan Africa, this figure was as high as 98 per cent and 97 per cent respectively.
Between 2010 and 2022, low- and middle-income countries have made consistent progress in expanding social protection, but the pace has been insufficient to meet the increasing needs of the poor, according to the report.
Data from 73 countries evaluated by the World Bank showed that the percentage of people receiving any form of social protection increased to 51 per cent from 41 per cent during this period. Most of the recent advancements have come from social assistance programmes such as cash transfers, school meals and food aid.
LICs experienced the most significant gains, with coverage among the poorest increasing by 17 percentage points, more than doubling, although starting from a very low base. Despite these improvements, significant gaps remained.
On average, three out of four people in LICs (75 per cent) and more than half in LMICs (58 per cent) still do not receive any social protection. Social insurance, including benefits like pensions, health or unemployment support, is nearly nonexistent in low-income nations, covering just 2 per cent of the population and only 8 per cent in lower-middle-income countries.
If current trends persist, it could take until 2043, or 18 years, to fully cover people living in extreme poverty, and until 2045, or 20 years, to cover the poorest 20 per cent of households with social protection and provide the support they need.
The report warned that the slow progress would impact the United Nations-mandated Sustainable Development Goals. Without significant acceleration, the SDG of achieving substantial coverage for the poor and vulnerable by 2030 will remain unattainable, stated the report.
Furthermore, climate change is exacerbating existing vulnerabilities and could push up to 130 million more people into extreme poverty by 2030 if urgent reforms are not implemented, it warns. Yet most social protection systems are still unprepared to address climate risks or provide compensation for loss and damage.
Fragile and conflict-affected countries, mainly in Africa and Asia, are expected to host 60 per cent of the world’s extreme poor by 2030. These regions face the most severe challenges and urgently need both emergency relief and long-term social protection.
Bridging the social protection gap will require tailored strategies based on each country’s capacity, fiscal space, and context. For instance, low- and lower-middle-income nations must focus on expanding targeted, noncontributory assistance and economic inclusion programmes.
All nations need to enhance their systems to quickly adapt to challenges like climate change, conflicts and economic downturns. However, financing remains a significant barrier.
The report stated that countries are spending an average of 5.3 per cent of their gross domestic product (GDP) on social protection, a figure that has remained relatively stable post-COVID. However, there are significant disparities: High-income countries spend 5.3 times more of their GDP and 85.8 times more per capita than low-income countries.
Additionally, spending is heavily skewed towards social insurance, mainly benefiting formal sector workers and retirees, while social assistance, which is more inclusive of the poor, receives a much smaller share. Most low-income countries spend only 0.8 per cent of GDP on social assistance, compared to 2 per cent in upper middle-income countries.
In many fragile and conflict-affected states, up to 77 per cent of social assistance programs rely entirely on international grants.
The report suggests that subsidy reforms could unlock additional resources. Currently, global subsidies, especially in fossil fuels and agriculture, amount to over $7 trillion annually and often benefit wealthier households more than the poor. Redirecting regressive subsidies towards targeted support for the poor and vulnerable will free up resources for more effective programs.
Investment in robust delivery mechanisms, such as dynamic social registries, digital payments and integrated case management, is crucial for expanding the social safety net. Therefore, the report called for building integrated systems that are shock-responsive, climate-resilient, and digitally enabled to ensure timely and inclusive support during future crises.