Major reforms to Britain's benefits system announced in bid to cut welfare bill (2025)

Major reforms to the benefits system have been announced as the Government seeks to cut Britain’s ballooning welfare bill by £5billion.

Work and Pensions Secretary Liz Kendall said it was unsustainable that one in 10 people of working age were claiming sickness benefits as she unveiled the changes on Tuesday.

Personal independence payments (PIP) given to people with disabilities will not be frozen or means tested, Ms Kendall confirmed. But the system will be reformed, with the criteria for those able to claim being tightened.

What changes to benefits has the Government announced?

• Ministers will merge jobseeker's allowance and employment and support allowance

• PIP will be retained and will not be frozen after a backlash from backbench Labour MPs, but the number of people eligible to claim it will be cut

• The minimum age to claim PIP will be raised to 18 and from November 2026 only the most severely disabled will qualify, requiring four points in at least one activity for the daily living allowance

• The work capability assessment (WCA) for universal credit will be scrapped in 2028

• Standard universal credit allowance will be increased by £775 in 2029/30

• A "right to try" initiative, which will mean people on disability welfare who want to attempt to get back into work won't lose their benefits if they try a job, will be introduced

• A “Keep Britain Working” review, led by former John Lewis boss Sir Charlie Mayfield, will help establish what employers can do to keep people in work

• Universal Credit claimants with severe, lifelong disabilities will no longer face reassessments for their benefits

The minister said job seeker's allowance and employment and support allowance will be merged.

Ms Kendall told the Commons that the "complex" and "time-consuming" work capability assessment for universal credit is set to be scrapped by 2028.

The Government will also legislate for a "right to try", meaning that people currently on disability welfare will be able to try a job before losing access to their benefits.

It will guarantee “that work in and of itself will never lead to a benefit reassessment, giving people the confidence to take the plunge and try work without the fear this will put their benefits at risk,” Ms Kendall said.

Standard universal credit allowance will be increased by £775 in 2029/30.

Ms Kendall added that the Government also wanted to tackle the "perverse financial incentives" that the Conservatives "created, which actively encourage people into welfare dependency".

There will also always be a social security system “there for people in genuine need”, she insisted.

The number of people in England and Wales claiming either sickness or disability benefit has soared from 2.8 million in 2019 to about 4 million today.

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The benefits bill has risen with this increase, reaching £48billion in 2023-24, and is expected to continue rising to £67billion in 2029-30, which would exceed the current schools budget.

The proportion of PIP claimants in England and Wales who are under the age of 30 has also soared in recent years, from 14.5% of the total in January 2020 to 16.4% in January 2025.

People aged 30-44 made up 18.8% of the total in January 2020 and 20.9% in January 2025.

By contrast, the proportion of claimants who are aged 45-59 has fallen from 36.3% in January 2020 to 30.1% in January 2025, while the figure for 60 to 74-year-olds is broadly unchanged, rising very slightly from 30.5% to 30.9%.

Chairwoman of the Commons Work and Pensions Committee Debbie Abrahams said the £5 billion saving is the largest reduction in social security support since 2015.

She said: "I would put that there are alternative, more compassionate ways to balance the books rather than on the back of sick and disabled people."

Former shadow chancellor John McDonnell warned people could die as a result of the cuts, telling MPs: "The reality is trying to find up to £5 billion worth of cuts by manipulating, by changing, the Pip (personal independence payment) rules, the criteria will result in immense suffering and - we've seen it in the past - loss of life."

The Disability Benefits Consortium, an umbrella body representing more than 100 charities and organisations, condemned the "cruel cuts".

The consortium's policy co-chairman Charles Gillies said: "These immoral and devastating benefits cuts will push more disabled people into poverty, and worsen people's health."

The Prime Minister's official spokesman told reporters: "I think the Prime Minister has been clear there is both a moral and an economic case for fixing our broken social security system that's holding our people back, and our country back.

"Three million people are out of work for health reasons, and one in eight young people not currently in work, education or training.

"So we've got a duty to fix the system, to ensure that that safety net is always there for the most vulnerable and severely disabled, but also supports back into work, rather than leaving people written off."

Labour

Liz Kendall

benefits

Government

Keir Starmer

Disabilities

Conservatives