The UK Government has recently confirmed significant changes to the welfare system, aiming to save an estimated £5 billion. Chancellor Rachel Reeves has revealed six key alterations that will impact individuals claiming welfare payments. These reforms are projected to generate savings of £4.8 billion by the year 2029-30, with a substantial amount stemming from working-age sickness and disability benefits. The alterations include freezing the health-related universal credit for new claimants, lowering the standard universal credit allowance to £106 per week in 2030, and implementing stricter eligibility criteria for personal independence payments (PIP) starting from November 2026.
Furthermore, existing claimants of health-related payments will be frozen in cash terms until 2030, and those receiving incapacity benefits will face a freeze in cash terms at £97 per week starting from April next year. Additionally, individuals under the age of 22 will no longer be eligible to receive the incapacity benefit top-up of universal credit. The Department of Work and Pensions has released paperwork detailing the projected impact of these changes. According to their assessment, approximately 3.2 million families, comprising both current and future recipients, are anticipated to experience financial losses due to these modifications, equating to an average annual loss of £1,720 per family compared to inflation.
Moreover, it is estimated that 370,000 current recipients may lose their entitlement to PIP, alongside 430,000 future PIP claimants who might not receive the benefits they would otherwise be entitled to, resulting in an average annual loss of £4,500. Alarmingly, 250,000 individuals, including 50,000 children, could be pushed into poverty post-housing expenses. The Office for Budget Responsibility projects that 800,000 people will encounter financial losses from PIP adjustments, with nearly half of them stemming from reassessments. On the brighter side, 3.8 million families are expected to benefit financially from these modifications, with an average gain of £420 annually compared to inflation.
Expressing concerns over the potential repercussions of these changes, the Chief Executive of the Joseph Rowntree Foundation, Paul Kissack, highlighted the adverse effects on vulnerable populations. He emphasised that the cuts to health-related benefits could push 250,000 people, including 50,000 children, into poverty, exacerbating the existing hardships faced by many. Kissack further critiqued the government, stating that the burden of these changes falls heavily on the 3.2 million families who are set to be worse off as a result of the reforms. Amidst these challenges, calls for the government to protect vulnerable individuals and families from economic harm have emerged.
As the impact assessment unveils the potential implications of the welfare system changes, advocacy groups and charities are gearing up to support those at risk of falling into financial instability. With a significant number of families set to be adversely affected by these modifications, concerns regarding the well-being of vulnerable groups are mounting. The government’s focus on fiscal austerity has sparked debates on balancing budgetary concerns with social welfare imperatives, raising questions about the equitable distribution of resources amidst economic reforms. The need for holistic support systems to safeguard the most vulnerable during times of economic policy changes has become increasingly evident, emphasising the importance of social safety nets in promoting inclusive growth and well-being.