(qlmbusinessnews.com . Wed 19th Mar, 2025) London, UK —
Reforming Welfare: What the New Pip and Universal Credit Changes Mean for Claimants
The UK government has unveiled sweeping reforms to the welfare system, aimed at reducing spending by £5bn a year by 2030 while encouraging more people to return to work. A key element of the changes is a tougher approach to claiming Personal Independence Payment (Pip) – a benefit currently provided to over 3.6 million individuals with long-term physical or mental health conditions.
Under the new proposals, assessments for the daily living component of Pip will be tightened from November 2026. Claimants will now need to score at least four on a given task – for example, requiring help to wash between the shoulders and waist – rather than benefiting from lower scores that previously qualified them for support. The weekly rates for the daily living component will continue at a standard rate of £72.65 or an enhanced rate of £108.55, while the mobility element remains unchanged.
Simultaneously, changes to Universal Credit will see a rise in the basic payment for jobseekers; however, individuals under 22 will no longer be eligible for the incapacity benefit top-up. New claimants can expect this top-up to drop from £97 to £50 per week by next year, while the enhanced rate for existing claimants will be frozen until 2029–2030. Conversely, the basic Universal Credit payment is slated to increase by £775 annually by 2029–30.
The reforms are part of the government’s broader strategy to reduce its annual health and disability-related benefits bill – currently £65bn and expected to rise to £100bn by 2029. Measures include investing £1bn in tailored support to help those capable of working re-enter the workforce, scrapping the work capability assessment in favour of a system that focuses on how disability affects daily living, and a “right to try” scheme to encourage job-seeking without penalty. In addition, plans are under consultation to merge Jobseeker’s Allowance and Employment and Support Allowance into a single, time-limited benefit that is not means-tested.
Trade unions and several charities have urged ministers to reconsider cuts to disability benefits, warning that such measures could disproportionately affect those most in need. The changes are expected to have far-reaching consequences, with around 1.3 million people claiming disability benefits – primarily for mental health and behavioural conditions – representing 44% of all working-age claimants, according to the Institute for Fiscal Studies.
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