The UK government has announced a series of welfare reforms aimed at saving £5 billion annually by 2030. The reforms are designed to create a more "employment-encouraging" system, incentivizing people to actively seek work while safeguarding the rights of those unable to work. The introduction of this reform package comes at a time when the UK's economic situation is increasingly severe, with the government hoping to alleviate the pressure it faces in terms of borrowing and spending.
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03-20, 2025Under the new policies, it will be more difficult for people with minor illnesses to claim disability benefits. Extra benefits for health conditions will be frozen, with existing claimants' benefits remaining unchanged, but new claimants' benefits will be reduced by nearly half. Furthermore, individuals under the age of 22 may be ineligible to claim the additional allowance for health conditions within Universal Credit.
Secretary of State for Work and Pensions, Liz Kendall, stated that these reforms will place the welfare system on a more "sustainable footing," encouraging people to return to work. She also emphasized that since the COVID-19 pandemic, welfare spending related to health and disability has increased significantly, projected to rise from the current £65 billion per year to £100 billion by 2029. While the government has not provided detailed savings forecasts, it anticipates that the majority of savings will come from changes to the eligibility criteria for disability benefits.
However, charities and some Labour MPs are concerned that cutting benefits will push disabled people into poverty. Addressing these concerns, the government abandoned plans to freeze Personal Independence Payment (PIP), which provides additional living costs for people with long-term physical and mental health problems. Nevertheless, Kendall stated that from November 2026, eligibility for PIP (the main disability benefit in England, Wales, and Northern Ireland) will be tightened. The threshold for obtaining the PIP daily living component, which is for people who need help with everyday tasks and starts at £72.65 per week, will be raised. The mobility component, which is for people who need help with getting around, will remain unchanged.
Kendall also announced that Work Capability Assessments will be abolished in 2028. These assessments are used to determine whether someone is fit for work and whether they can receive additional benefits due to a health condition or disability. She argued that these assessments are "complex, time-consuming, and often stressful for applicants" and are based on an "all-or-nothing division of work capability." In the future, financial support for health conditions will only be provided through PIP assessments, which will be based on the impact of a person's health condition, rather than their ability to work. Reassessments to determine whether someone is still eligible for benefits will increase, but those with severe conditions that will never improve will not be reassessed. From next April, the additional amount for health conditions or disabilities in Universal Credit will be frozen, with existing claimants maintained until 2029/30, while new claimants will receive nearly half as much. Additional support will be provided for people with severe, lifelong illnesses who will never be able to work. At the same time, the standard allowance of Universal Credit will be permanently increased above inflation, equivalent to an annual increase of £775 in cash terms by 2029/30. A "try it" guarantee will also be introduced to ensure that people who try work do not lose their existing benefits if the work is unsuccessful.
The Disability Benefits Consortium, representing over 100 charities and organizations, stated: "These unethical and damaging benefit cuts will push more disabled people into poverty and worsen people's health." The Scottish National Party (SNP) said that the measures would "harm the most vulnerable" and "mark the start of a new era of austerity." Labour MP Debbie Abrahams argued that "there are more compassionate ways to balance the books than on the backs of sick and disabled people." However, some other Labour MPs agreed with the government's view that reforming the welfare system to encourage people to work is morally justifiable. The Conservatives said that the changes were "too little, too late" and that "tougher action" was needed. Shadow Secretary of State for Work and Pensions, Helen Whately, questioned why the government was only planning to save £5 billion per year when total spending on health and disability benefits is projected to exceed £100 billion per year by 2029/30. Liberal Democrat Work and Pensions Spokesperson Steve Daling said: "If the government really wants to cut welfare spending, it should seriously address health and social security issues, as well as address the Employment and Pensions Department that has already collapsed."
Some of the reforms require new legislation, which increases the possibility of rebellions from some Labour MPs during parliamentary votes. However, the government's majority limits the threat posed by the votes. The Resolution Foundation think tank estimates that between 800,000 and 1.2 million people could lose support due to restrictions on PIP applications. Kendall said that details of the number of people affected would be published in Chancellor Rachel Reeves's Spring Statement next week.
