Government U-Turn on Disability Benefits

The UK government has scaled back parts of its planned reforms to disability benefits, following criticism from MPs and campaign groups.

What Has Changed

Initial proposals would have reduced spending on Personal Independence Payment (PIP) and the health-related element of Universal Credit (UC), with savings estimated at more than £5 billion per year by 2029.

After opposition:

 PIP: Current claimants will not face changes to the daily living component. Instead, a review of PIP assessments will be carried out ( MoneyWeek, 2025 ).

 Universal Credit: Existing claimants will continue to receive the current health-related element. However, new claimants from late 2026 will receive £50 per week,

compared with the current £97. This lower rate will remain frozen until 2029 (The

Guardian, 2025).

Reasons for the U - Turn

The decision followed pressure inside Parliament, with over 120 Labour MPs expressing concerns about the reforms. Disability organisations also argued that the proposed cuts would have negative social and economic consequences (Financial Times, 2025).

As a result, projected savings from the reforms have been reduced to around £2.5 billion annually (Community Care, 2025).

Impact

While the revised plan protects existing recipients, it introduces a distinction between current and future claimants. According to the Work and Pensions Committee, around 50,000 new claimants could face financial hardship by 2030 under the revised policy (MoneyWeek, 2025).

Next Steps

The government has committed to a review of PIP assessments, though details have not yet been set out. Chancellor Rachel Reeves will also need to address the reduced savings in the wider budget (RNIB, 2025).

References:

1. MoneyWeek – Government confirms £2.5bn U-turn on PIP and Universal Credit

2. The Guardian – Tens of thousands at risk of poverty despite Labour’s benefit U-turn

3. Financial Times – Starmer guts UK welfare reforms to avoid Commons defeat

4. Community Care – Government shelves Personal Independence Payment cut

5. RNIB – Where are we now: The benefits U-turn unpacked