Major changes to welfare under consideration by ministers include cuts to disability benefits for young claimants, limiting the Personal Independence Payment (PIP), and further stripping of Motability, according to reports. The government is contemplating removing the health element of universal credit for claimants under 25, a measure affecting over 250,000 individuals, reports BritPanorama.
The award for this age group was nearly halved last year under amended plans to reduce welfare spending by the previous government, and there are indications that this adjustment could also apply to existing claimants. Meanwhile, any spending cuts would purportedly fund employment support initiatives aimed at young people, including subsidised jobs and mental health support, as the number of youths not in education, employment, or training (NEET) hovers around one million.
Further proposals suggest that PIP could be entirely replaced for those under 25, or overhauled for all claimants, with potential cut-offs around the ages of 50 or 60. The expansions of these proposals mark a significant shift from the considerations of new Prime Minister Andy Burnham, whose predecessor, Sir Keir Starmer, faced backlash last year over welfare spending issues.
Spending on health benefits is projected to reach £77.1 billion in 2025/26, a steep increase from £36 billion in 2019/20. Burnham has asserted his government will not pursue “crude cuts” to reduce Britain’s benefits bill; nonetheless, the reported plans could reignite tensions with Labour backbenchers, who recently revolted over proposals to restrict PIP.
All flagged changes require primary legislation, necessitating a parliamentary vote. Disability campaigners have voiced strong opposition to potential cuts, pushing back against suggestions that would disadvantage younger claimants. A coalition of over 40 charities warned that such measures would “worsen health and deepen poverty.” Current estimates indicate that nearly half of households with an under-22 on universal credit’s health element are in poverty, a figure that could rise to around 90% if support is withdrawn, potentially driving individuals away from the workforce.
Looking at the broader context, Conservative leader Kemi Badenoch has proposed that her party replace universal credit for claimants under 25 who have been unemployed for over six months, instituting a ‘Get to Work’ scheme demanding higher work-finding obligations. Earlier this year, Reform UK suggested a £50 billion reduction in the welfare budget by eliminating both PIP and the health component of universal credit, a plan that faced scrutiny and criticism from across the political spectrum.
Moreover, another consideration includes additional cuts to Motability, which allows PIP claimants to lease vehicles, following last year’s removal of tax breaks worth £300 million. Any announcements related to these welfare changes are not expected until after the completion of two government-commissioned reports scheduled for autumn: Sir Stephen Timms’ review of PIP and Alan Milburn’s review of youth unemployment.
At a recent Labour conference, Work and Pensions Secretary Pat McFadden emphasised the need for welfare reform as “the moral crusade of our times,” acknowledging the large number of young people reliant on benefits. He noted that meaningful decisions will emerge once the two reports are presented this year.
A spokesperson for the Department for Work and Pensions (DWP) indicated that these reviews will lay the groundwork for sustainable reform without pre-empting their influences. The department is currently initiating changes through the youth guarantee, adjusting the disparity between universal credit standard and health rates, reinstating face-to-face assessments, and investing £3.5 billion in employment support for individuals with disabilities and long-term health conditions.
The focus on reform marks an essential juncture in the UK’s welfare conversation, as policymakers navigate a landscape marked by urgent socioeconomic challenges.
