Benefits crackdown unveiled with aim to save £5bn a year by 2030

The government has unveiled sweeping changes to the benefits system, aimed at saving £5bn a year by 2030.

Work and Pensions Secretary Liz Kendall said the overhaul would create a more "pro-work system" to encourage people to take up jobs, while protecting those who cannot work.

The changes will make it harder for people with less severe conditions to claim disability payments. Extra benefit payments for health conditions will also be frozen for current claimants and nearly halved for new applicants.

And people aged under 22 could be prevented from claiming universal credit top-up payments for health conditions.

The government has not given a precise breakdown of the forecast savings but the bulk are expected to come from changes to eligibility for disability payments.

The overall benefits bill will continue to rise - but Kendall told the BBC the changes would put welfare on a more "sustainable footing" by getting people into work.

Spending on health and disability-related benefits has ballooned since the Covid pandemic, and has been forecast to increase from £65bn a year currently to £100bn by 2029.

The proposals are the result of months of work but they have become more urgent with the worsening economic backdrop, which has made it more difficult for the government to meet its self-imposed rules on borrowing and spending.

Charities and some Labour MPs are worried benefit cuts will push disabled people into poverty.

The government responded to their concerns by scrapping plans to freeze personal independence payments (Pips), which provide extra living costs for people who have a long-term physical or mental health condition.

But Kendall said eligibility for Pips - the main disability benefit in England, Wales and Northern Ireland - would be tightened from November 2026.

It will become harder to qualify for the daily living component of Pip, which is for people who need help with everyday tasks and starts at £72.65 a week.

There will be no change to the mobility component, for those who need help getting around.

Kendall told the BBC details on how many people would be affected would be set out alongside Chancellor Rachel Reeves' Spring Statement next week.

The Resolution Foundation think tank has estimated between 800,000 and 1.2 million people could lose support because of restrictions on claiming Pip.

Kendall also announced work capability assessments, which are used to determine whether someone is fit to work and if they can receive additional benefits payments because of a health condition or disability, would be scrapped in 2028.

She said the assessments were "complex, time-consuming and often stressful for claimants", as well as being based "on a binary can-can't work divide".

In the future, financial support for health conditions will only be available through the Pip assessment, based on the impact of someone's health condition rather than their capacity to work.

Reassessments to determine whether someone is still eligible for benefits will increase, although those with the most severe conditions that will never improve will not be reassessed.

From April next year the extra amount of universal credit for a health condition or disability will be frozen for existing claimants until 2029/30 and cut by almost half for new claimants.

There will be an additional premium for people with severe, lifelong conditions that mean they will never work.

Meanwhile, there will be a permanent, above-inflation rise to the standard allowance of universal credit – equivalent to a £775 annual increase in cash terms by 2029/30.

The government will also introduce a "right to try" to guarantee that people who try out a job will not lose their existing benefits if it does not work out.

The Disability Benefits Consortium, which represents more than 100 charities and organisations, said: "These immoral and devastating benefits cuts will push more disabled people into poverty, and worsen people's health."

The SNP said the measures would "harm the most vulnerable" and "mark the start of a new era of austerity cuts".

Debbie Abrahams, the Labour MP who chairs the Commons work and pensions committee, argued there were "more compassionate ways to balance the books rather than on the back of sick and disabled people".

However, other Labour MPs agree with the government that there is a moral case for reforming the welfare system to encourage people into work.

The Conservatives said the changes were "too little, too late" and needed to be "tougher".

Shadow work and pensions secretary Helen Whately asked why the government was only planning to save £5bn annually, when the total bill for health and disability benefits is forecast to rise to more than £100bn a year by 2029/30.

Liberal Democrat work and pensions spokesman Steve Darling said: "If the government was serious about cutting welfare spending it would get serious about fixing health and social care and the broken Department of Work and Pensions."

Some of the changes will require new legislation, raising the prospect of a rebellion by some Labour MPs during votes in Parliament.

However, the size of the government's majority limits the threat from a vote.

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