Navigating the New Welfare System: Major Changes to PIP and Universal Credit Explained

The UK government has announced significant reforms to the welfare system, aiming to save £5 billion annually by 2030 and enhance employment opportunities. Key changes include stricter criteria for the Personal Independence Payment (PIP), a crucial disability benefit received by over 3.6 million individuals. Starting November 2026, applicants will need to score at least four points in a key activity to qualify for the daily living component, while mobility payments remain unaffected. Current rates are set at £72.65 weekly (standard) and £108.55 (enhanced) for daily living, and £28.70 (standard) and £75.75 (enhanced) for mobility, paid every four weeks tax-free. The government will introduce more frequent reassessments for many PIP claimants but exempt those with severe, permanent disabilities from reassessment.

Changes to Universal Credit (UC) also target 7.5 million beneficiaries, with plans to raise the basic payment but restrict additional incapacity benefits for those under 22. The government indicates these reforms will reconnect job-seekers with work opportunities while supporting those unable to work due to severe health conditions.

A new ‘right to try’ system will allow claimants to explore employment without losing benefits, and significant reorganization of benefits like merging Job Seekers Allowance with Employment Seekers Allowance into a single, non-means-tested option is planned. The overarching goal is to control the rising expenditure on health and disability benefits, predicted to surge from £65 billion for health-related benefits to £100 billion by 2029. The new welfare scheme aims to phase out the work capability assessment by 2028, shifting towards a more holistic view of how disabilities impact daily living.