The Department for Work and Pensions (DWP) has confirmed significant changes to key benefits in 2025, representing what the government describes as “the biggest shake-up to the welfare system in a generation.” These reforms will impact millions of claimants across the UK, with the government aiming to save £5 billion annually by 2029-30. This article explains the cuts to four major benefits, the timeline for implementation, and what these changes mean for current and future claimants.
Universal Credit Changes
Universal Credit (UC) is undergoing substantial reforms that will affect both new and existing claimants:
Standard Allowance Increases
While not a cut, it’s important to note that the Standard Allowance (the basic amount everyone gets) will increase:
- From April 2026, the Standard Allowance will rise for all claimants
- For a single person aged 25 and over, rates will increase from £92 per week in 2025/26 to £106 per week by 2029/30
- Equivalent percentage increases will apply to couples and those aged under 25
Health Element Cuts
The Health Element (previously known as the Limited Capability for Work and Work-related Activity element or LCWRA) provides additional money for those unable to work due to health conditions:
- For existing claimants: The Health Element will be frozen at £97 per week until 2029/30, effectively a cut in real terms due to inflation
- For new claimants from April 2026: The Health Element will be reduced by nearly half, from £97 per week to £50 per week, then frozen at this amount until 2029/30
- The government plans to introduce an additional premium for those with the most severe, life-long health conditions who will never be able to work, though details remain vague
Age Restrictions
- The government will consult on delaying access to the Health Element until age 22
- Young people under 22 would instead be directed to a “Youth Guarantee” offering work or training opportunities
| Universal Credit Element | Current Rate (2025/26) | Changes |
|---|---|---|
| Standard Allowance (single 25+) | £92 per week | Rising to £106 by 2029/30 |
| Health Element (existing claimants) | £97 per week | Frozen until 2029/30 |
| Health Element (new claimants from April 2026) | £97 per week | Cut to £50 per week |
Personal Independence Payment (PIP)
Personal Independence Payment (PIP) helps with extra costs associated with long-term health conditions or disabilities. Major changes include:
Stricter Eligibility Requirements
From November 2026, the eligibility criteria for PIP will tighten significantly:
- Currently, claimants need to score at least 8 points across all daily living activities to qualify for the standard rate of the daily living component
- Under new rules, claimants must score a minimum of 4 points on at least one single daily living activity to qualify, in addition to the existing 8-point threshold
- The government estimates 370,000 current PIP recipients may lose entitlement upon reassessment under these rules
Assessment Process Changes
- Work Capability Assessment (WCA) will be scrapped by 2028
- A new single assessment system based on the PIP assessment will be introduced
- Face-to-face assessments will increase
- The health element of Universal Credit will be based on PIP assessment from 2028
| PIP Component | Current Rate (2025/26) | Changes |
|---|---|---|
| Daily Living Standard | £73.90 per week | New minimum 4-point requirement on single activity |
| Daily Living Enhanced | £110.40 per week | New minimum 4-point requirement on single activity |
| Mobility Standard | £29.20 per week | No direct changes announced |
| Mobility Enhanced | £77.05 per week | No direct changes announced |
Employment and Support Allowance (ESA)
Employment and Support Allowance provides financial support for people unable to work due to illness or disability:
Conversion to “Unemployment Insurance”
- New Style ESA and New Style Jobseeker’s Allowance (JSA) will be combined into a single, time-limited benefit called “Unemployment Insurance”
- The new benefit will be non-means tested but only available to those who have paid sufficient National Insurance contributions
- It will be paid at the current ESA rate of £138 per week
- Claimants will be expected to actively seek work, with accommodations for those with work-limiting health conditions
Assessment Process
- The Work Capability Assessment will be scrapped by 2028
- Reassessments for ESA claimants will be reintroduced (having been largely suspended since 2021), except for those who will never work and those under special rules for end-of-life care
- The new single assessment will be based on the PIP assessment and focus on the impact of disability on daily living, rather than work capacity
Housing Benefit
Housing Benefit helps people on low incomes pay their rent. The main changes include:
Migration to Universal Credit
- Significant movement of Housing Benefit claimants to Universal Credit
- The DWP aims to move all legacy benefit claimants, including those on Housing Benefit, to Universal Credit by March 2026
- This completes the Universal Credit rollout and closes all legacy benefits by this date
Additional Housing Investment
While not a direct cut to Housing Benefit, the government has announced:
- An additional £2 billion investment in social and affordable housing in 2026-27
- This is intended to deliver up to 18,000 new homes
- Further housing program announcements are expected in June 2025
Timeline of Implementation
| Date | Change |
|---|---|
| April 2025 | 1.7% increase in benefit rates for the 2025/26 financial year |
| June 2025 | Consultation period ends for welfare reform Green Paper |
| End of 2025 | “Right to Try” work guarantee to be introduced |
| April 2026 | Universal Credit Standard Allowance increases begin |
| April 2026 | Health Element cut to £50 per week for new claimants |
| April 2026 | Health Element frozen for existing claimants |
| March 2026 | Completion of migration from legacy benefits to Universal Credit |
| November 2026 | New PIP eligibility criteria take effect |
| 2027/28 | Possible implementation of age 22 restriction for UC Health Element |
| 2028 | Work Capability Assessment to be fully scrapped |
| 2029/30 | Completion of Universal Credit Standard Allowance increases |
Impact on Claimants
The government’s own analysis indicates these changes will have significant impacts:
- 2.25 million families currently receiving the Health Element of Universal Credit will lose an average of £500 per year by 2029/30
- 370,000 current PIP recipients may lose entitlement when reassessed under the new rules
- 430,000 people who would have qualified for PIP under current rules will not be eligible under the new criteria
- 730,000 future recipients of the UC Health Element will lose an average of £3,000 per year
- 3.9 million households not on the UC Health Element will gain an average of £265 per year from the Standard Allowance increase
These changes particularly affect:
- People with mental health conditions
- Those with conditions such as back pain, arthritis, cardiovascular diseases, and chronic pain syndrome
- Older claimants (over 50) who are less likely to score high enough on single activities to maintain PIP eligibility
- Young people under 22 who may lose access to the Health Element
Government Rationale
The government has justified these reforms citing several factors:
- Unsustainable growth in health and disability benefits spending, projected to reach £70 billion annually by the end of the decade
- Significant increase in PIP claims, with numbers expected to double from 2 million to 4.3 million this decade
- Current system described as creating “perverse incentives” that discourage work
- Need to balance financial support with encouraging and enabling employment where possible
Where to Get Help
If you’re concerned about how these changes might affect you:
- Visit the official GOV.UK website for updates on benefits changes
- Contact Citizens Advice for personalized guidance
- Visit Turn2us for benefits calculators and further information
- Seek advice from disability organizations like Scope for disability-specific support
FAQs
Q: When will these benefit cuts take effect?
A: Different changes will be implemented at different times, with most major changes starting from April 2026 and November 2026, with full implementation by 2029/30.
Q: Will my current benefit amount be reduced immediately?
A: For most existing claimants, changes will happen gradually. PIP changes will only affect you at reassessment after November 2026, and the UC Health Element will be frozen rather than immediately cut.
Q: What is the “Right to Try” guarantee?
A: This ensures that trying work or following employment pathways won’t trigger immediate reassessment or benefit reviews, removing the fear of losing benefits if employment doesn’t work out.
Q: Will there be any protection for vulnerable claimants?
A: The government has promised an “additional premium” for those with severe, lifelong conditions who will never be able to work, though details remain limited.
Note: This article provides information based on announced government plans. Always check official sources for the most up-to-date guidance on benefits changes.
