Spring Statement 2025: Universal Credit and disability benefits shake-up confirmed

Key measures at-a-glance

• Universal Credit payment amounts to change

• Personal Independence Payments (PIP) eligibility will be restricted

• 'Work Capability Assessment' to be scrapped

• Establishing a 'right to try work' principle in law

• A new 'Unemployment Insurance' benefit will be established

Universal Credit payment amounts to change

Here's what's happening with Universal Credit in England, Scotland and Wales (in Northern Ireland the Executive will be responsible for any changes, though it's likely to follow the plans as set out):

1. From April 2026, the standard allowance (the basic amount you get) will rise for new and existing claimants. The Government says the rises will be "above inflation", and will see the rate for a single person aged 25 or over rise from £92 a week in 2025/26 to £106 a week by 2029‑30.

2. The health element (which you get if you can't work because of sickness or disability), will change as follows:
   
   a) For NEW claimants, from April 2026, this element will be almost halved, from £97 a week in 2024/25 to £50 a week in 2026/27, and then frozen at this level until 2029/30.
   
   However, the Government says that those with the most severe, life-long health conditions – who have no prospect of improvement and will never be able to work – will "see their incomes protected through an additional premium".
   
   b) For EXISTING claimants, the health element will be frozen at the current rate of £97 a week until 2029/30.

These changes mean that 2.25 million families who currently receive the health element of Universal Credit will lose £500 a year on average by 2029/30, while 3.9 million other families (who don't get the health element) will gain an average of £265 a year by 2029/30, according to the Government's own analysis.

The Government says its rebalancing of Universal Credit payment amounts is needed "to promote work, address perverse incentives and to start to improve basic adequacy".

Personal Independence Payments (PIP) eligibility will be restricted

From November 2026, the eligibility criteria for personal independence payments (PIP), a benefit aimed at helping those with disability or long-term illness with increased living costs, will be tightened in England and Wales.

The Department for Work and Pensions (DWP) assesses eligibility on a points system: the more difficulty you have the more 'points' you'll get. To get the main component of PIP, which is for extra daily living costs, you currently need between eight and 12 points in total (alongside meeting the other criteria). But when the changes come in, you'll also need a minimum of four points on a single activity (for example washing, dressing or shopping).

The Resolution Foundation think tank said the tightening of PIP eligibility would mean between 800,000 and 1.2 million people losing support of between £4,200 and £6,300 per year by the end of the decade.

There will be no change to the separate 'mobility component', which is for extra help getting around.

The 'Work Capability Assessment' will be scrapped

The test which determines someone’s eligibility for the health element of Universal Credit will be scrapped in 2028, having been described by Work and Pensions Secretary Liz Kendall as "complex, time consuming and often stressful for claimants".

The Government will consult on a new single assessment, based on the existing system for Personal Independence Payments – this will consider on the impact of disability on daily living, not on capacity to work.

Establishing a 'right to try work' principle in law

According to a survey by DWP, over half of people claiming Universal Credit or Employment and Support Allowance (with no work-related activity requirements) said they felt worried that they would not get their benefits back if paid employment didn't work out.

The Government says that it will introduce legislation "as soon as possible" to guarantee that trying work will not trigger a reassessment for those claiming Universal Credit, Personal Independence Payments (in England and Wales), or New Style Employment and Support Allowance. It said this will "give people the confidence that working will not in and of itself trigger a reassessment and a potential loss of benefits".

A new 'Unemployment Insurance' benefit will be established

This would be a new non-means tested entitlement "for people who have contributed into the system".

The plan would be to combine the contribution-based Jobseeker’s Allowance (JSA) and Employment and Support Allowance (ESA) into a single new, time-limited benefit, paid at the current ESA rate of £138 a week.

People claiming this would be expected to actively seek work, with accommodations for those with work-limiting health conditions, the Government says.

Additional reporting by the Press Association.