Government’s Spring 2025 Statement – Benefit changes and what they mean

In the lead-up to the government's Spring 2025 Statement, the Department for Work and Pensions (DWP) announced that it would make changes to the welfare system. The Chancellor of the Exchequer, Rachel Reeves, confirmed the changes in her Spring Statement, reflecting the government's bid to reduce spending and encourage more people back into the country's workforce. She also said that she was 'not satisfied' with the Office for Budget Responsibility's growth forecast for 2025 which had halved from 2% down to 1%. The Chancellor explained that although the OBR estimated that the government's welfare reforms would save £4.8bn, it had not built in the increase in growth achieved by returning people to the workforce, as this is difficult to predict.

The Spring Statement underlined the Treasury's commitment to increase defence spending to 2.5% of GDP by 2027, as well as plans to save £3.5bn over the next 4 years by launching a voluntary redundancy scheme for civil servants, reducing departmental government spending. Tax evasion was also mentioned by Reeves, outlining that the government aims to increase the number of harmful fraud prosecutions by 20%, raising a further £1bn in the process.

In this article, we detail the benefit changes that have been announced, what they mean, and how they may affect you.

What benefit changes have been announced?

The secretary for the Department of Work and Pensions, Liz Kendall, announced welfare reforms in her statement in the House of Commons on the 18th of March, and these were expanded on in the Spring Statement. The government has labelled these changes as "The biggest shake up to the welfare system in a generation". They will affect some qualifying assessments as well as the amount of support that you may be entitled to if you are unable to work. Universal Credit, Personal Independence Payments, Employment Support and Jobseeker's Allowance are set to see changes estimated to save nearly £4bn in welfare spending.

How will Personal Independence Payments (PIP) change?

Under the current welfare system, Personal Independence Payments (PIP) are made to applicants to cover extra costs associated with being able to carry out tasks such as dressing, washing, and using the toilet. This is the 'daily living' part of the benefit. The 'mobility' part of PIP can be claimed in addition to the 'daily living' element to cover extra help needed to leave the house and get around.

To qualify for the 'daily living' PIP, an applicant is currently assessed against a list of daily tasks and allocated points to reflect the severity of the difficulty demonstrated. A minimum of 8 points, overall is needed to qualify for the lower rate of PIP benefit - a higher rate is paid to applicants who score higher than this. From April 2026, any person applying for PIP will have to score at least 4 points for at least one of the tasks assessed. This change will make the qualifying criteria more targeted and in turn, may mean that some people who qualify under the current assessment become ineligible for PIP. It is estimated that around 800,000 people who currently receive the benefit will become ineligible.

How will Universal Credit change?

The 'standard allowance' under Universal Credit (UC) will be increased starting in April 2026 from the current level of £92 per week (for a single person aged over 25) reaching £106 per week by  2029/30. However, the 'health component' of UC, which currently pays those who qualify based on incapacity to work, £97 per will find this is to be frozen at this amount until 2029/30. Also, those who make a new claim from April 2026 onwards and who qualify for the health component of UC will receive a lower benefit amount of £50 per week and this would be frozen until 2029/30. The health element of UC will no longer be available to claimants under the age of 22 years old.

Furthermore, the 'work capability assessment' (WCA) currently used to check if a person qualifies for the health component of Universal Credit will be switched to using the new PIP assessment criteria instead. This means that the benefit applicant will be assessed against the ability to complete daily living tasks instead of work tasks. The Department for Work and Pensions says, "By scrapping the WCA, the government intends to create a fairer system that reduces dependency, removes labels, and focuses on the individual's needs in terms of daily living rather than just their ability to work."

How will Employment Support Allowance and Jobseeker's Allowance change?

The government's reforms include changing the Employment Support Allowance and Jobseeker's Allowance to combine these two benefits into the Unemployment Insurance Benefit. The benefit will support those who have paid into the system by providing a regular payment should they become unemployed, but the payment will be time-limited, providing support while the claimant seeks a new job. The Unemployment Insurance Benefit will not be means tested and will pay £138 per week to match what would have been paid by Employment Support Allowance. The time-limited aspect of this benefit means that it may not support those who have long-term work incapacity - the secretary for the DWP, Liz Kendall, states, "People claiming this would be expected to actively seek work, with easements for those with work-limiting health conditions.".

What to do if you are worried about benefit changes

Although the DWP has outlined that it will overhaul systems to provide improved assessments and support for those in need of benefits so that the reforms do not push people into poverty, some will be anxious about the impact they may have. The following is a list of organisations that can provide support and information in these circumstances.

• Citizens Advice - provides information on your rights, including benefits, housing, employment, debt, consumer, and legal issues.
• Entitledto - an online tool that allows you to work out what benefits you can expect to receive based on your personal circumstances
• Scope - a disability charity that provides information and advice on changes to disability benefits, including Universal Credit, and can help you understand your rights.