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Welfare cuts: What's been happening with Pip and universal credit?

Image source, Getty Images

Published 17 March 2025

Updated 2 hours ago

A key disability benefit is "not fit for purpose" and requires fundamental change, a review has said.

Disability Minister Sir Stephen Timms has been leading a review into Personal Independence Payments (Pip) and his comments came as its interim report was published.

The review was commissioned by the government last year after it was forced to water down planned cuts to benefits in the face of fierce opposition from backbench Labour MPs.

What is Pip and what is it worth?

Pip is paid to 3.7 million people with a long-term physical or mental health condition, external in England and Wales.

It is not linked to someone's savings or income and does not affect other benefits, or the benefit cap, external. People can get Pip if they are working.

Pip includes a daily living component and a mobility component. Claimants may be eligible for one or both.

The daily living payments are:

a standard rate of £76.70 per week
an enhanced rate of £114.60 per week

The mobility payments - which are not affected by the changes - are:

a standard rate of £30.30 per week
an enhanced rate of £80.00 per week

What is happening to Pip?

In March 2025, the government announced plans to tighten daily living assessments for both current and future Pip claimants.

However, after more than 120 Labour MPs threatened to vote against the legislation, the government said those already receiving Pip would not be affected.

The original proposals said that people with the highest levels of a permanent condition or disability would no longer have to be reassessed at all.

The assessments involve questions about everyday tasks, with each scored from zero, for no difficulty, to 12, for most difficulty.

For example, needing help to wash your hair, or your body below the waist scores two points, but needing help to wash between the shoulders and waist is worth four points.

The government said originally that anyone claiming Pip for the first time after November 2026 would have to score at least four points for a single activity, rather than across a range of different ones.

However, this change was delayed until the wider Timms review of Pip. The final report - which will include recommendations - is due in the autumn.

The cost of Pip is forecast to rise to more than £41bn by 2030. The cuts originally proposed by the government aimed to save about £5.5bn a year by the end of the decade.

However, the Institute for Fiscal Studies (IFS) and Resolution Foundation said the concessions made by the government meant it would make no "net savings" by 2029-30.

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*   Published 2 July 2025

What has been driving the rise in disability benefit claims?

*   Published 30 June 2025

'I don't want to live on benefits, I want to work'

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Any changes to Pip would apply in England, Wales and Northern Ireland.

In Scotland, Pip has been replaced with Adult Disability Payment, external.

However, although new Pip rules would not apply, any reduction on spending on the benefit by Westminster would have a knock-on effect on the Scottish government's budget.

How did universal credit change?

The government also wanted to reform universal credit (UC), external, and these changes went ahead after MPs backed the renamed Universal Credit Bill in Parliament and covers the whole of the UK.

The basic level of universal credit is £424.90 a month for a single person aged 25 or over.

Before the changes went through, if someone had limited capacity to work due to a disability or long-term condition, the payment more than doubled because of an incapacity top-up.

However, from April 2026, the health element of universal credit paid to new claimants was halved for those with less severe conditions.

The change did not affect the 2.8 million existing claimants of the health element.

Why does the government want to cut welfare spending?

Image source, Getty

Image caption,

The government has promised to invest £1bn to help disabled people and those with long-term conditions find jobs and stay in work.

In 2019, almost three million working-age adults (aged 16 to 64) in England and Wales claimed either disability or incapacity benefit. That is 1 in 13 of the population.

By March 2025, that had grown to about four million or 1 in 10, according to the IFS.

The rise has been fuelled by an increase in the number of claimants citing mental health conditions.

Welfare spending is forecast to rise by over a quarter between 2025 and 2030, with the main increases being sickness-related payouts for working age adults and pensioner benefits.

By cutting the amount it is paying out on welfare benefits, the more the government has to spend elsewhere.

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Welfare cuts: What's been happening with Pip and universal credit?

Welfare cuts: What's been happening with Pip and universal credit?

What is Pip and what is it worth?

What is happening to Pip?

How did universal credit change?

Why does the government want to cut welfare spending?

Get in touch

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