Government unveils benefit crackdown designed to save £5bn

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The eligibility criteria for disability benefits will be narrowed in a bid to slash £5bn from the welfare bill, Liz Kendall has announced.

Speaking in the Commons, the work and pensions secretary said the number of new people claiming personal independence payment (PIP) is "not sustainable".

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She said the government will not freeze PIP - as reports had previously suggested - but instead make it harder to qualify for the daily living allowance component.

PIP is money for people who have extra care needs or mobility needs as a result of a disability.

People who claim it are awarded points depending on their ability to do certain activities, like washing and preparing food, and this influences how much they will receive.

Ms Kendall said that from November 2026, people will need to score a minimum of four points in at least one activity to qualify for the daily living element of PIP.

Currently, the standard rate is given if people score between eight and 11 points overall, while the enhanced rate applies from 12 points.

The changes will not affect the mobility component, Ms Kendall said - but it's unclear how many people will be impacted, with the Office for Budget Responsibility's costings report not due until next week's spring statement.

Warning of 'immense suffering'

Charities and unions reacted angrily to the announcement, and several backbench Labour MPs raised concerns.

Labour MP Jon Trickett said on X that "cutting welfare payments to sick people is wrong morally, fiscally and economically" and he will vote against the measures "when the time comes".

Former shadow chancellor John McDonnell warned people could die as a result of the cuts, telling MPs the cuts will lead to "immense suffering".

Charles Gillies, of the Disability Benefit Consortium, warned more disabled people would be pushed into poverty.

What other measures have been announced?

Ms Kendall also announced a review of the PIP assessment, which she said will be done "in close consultation with disabled people, the organisations that represent them and other experts".

There will also be a consultation on delaying access to the health top-up on universal credit until someone is 22, with the savings to be reinvested into work support and training opportunities.

And the Work Capability Assessment (WCA), which determines if a person is fit for work, will be scrapped in 2028, with financial support for people who are sick or disabled determined solely through the PIP assessment.

Ms Kendall described the current WCA system as "complex" and "time-consuming" for people trying to apply.

Other reforms include:

• Merging jobseeker's allowance and employment and support allowance

• Raising the standard universal credit allowance by £775 in 2029/30

• Introducing a "right to try" initiative so people who want to attempt to get back into work won't lose their benefits while they do

Ms Kendall said: "This is a significant reform package that is expected to save over £5bn by 2029."

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Chancellor looking for savings

It comes as Chancellor Rachel Reeves struggles to balance the books due to a grim economic picture, with further spending cuts expected in her spring statement on 26 March.

The cost of long-term sickness and disability benefits for working-age people has risen by £20bn since the pandemic and is forecast to hit £70bn over the next five years.

Ministers have said there is also a moral case for change, with one in eight young people not in education, training, or employment - prompting fears of a "wasted generation".

Ms Kendall said that while more people are now living with a disability, the increase in those seeking disability benefits is disproportionate.

Claims among young people are up 150%, while claims for mental health conditions are up 190% and claims for learning difficulties are up over 400%, she said.

Tories 'held our country back'

Ms Kendall blamed the Tories for creating a system that is "holding our country back".

She acknowledged that some people can never work, but said many sick and disabled people want to "with the right help and support" and they should "have the same chances and choices as everyone else".

Reports ahead of the announcements suggested Deputy Prime Minister Angela Rayner and Energy Secretary Ed Miliband were among the ministers to have voiced concerns in private.

But the prime minister's spokesman insisted the government is united in its agreement on the need for reform.

(c) Sky News 2025: Government unveils benefit crackdown designed to save £5bn