Earlier this week, on Wednesday 26th March 2025, Chancellor of the Exchequer, Rachel Reeves, delivered her Spring Statement. This statement serves to act as an update on the economy since the last fiscal statement in October, and is not a formal budget. Among other things, this has led to some changes for those who claim benefits:
Universal Credit
The standard allowance of universal credit will increase, with the rate for a single person aged 25 or over going up from £92 a week to £106 a week by the 2029/30 tax year.
The health element (given to those who cannot work due to sickness or disability) will also change. For new claimants, this element will go down from £97 a week to £50 in a week in the new tax year, and then be frozen at this level until 2029/30.
The government state that those with the most severe life-long conditions who will never be able to work will get an additional premium. For existing claimants, the health element will be frozen at £97 until 2029/30.
Personal Independence Payments (PIP)
Assessments for the daily living component of PIP will be tightened. These assessments involve questions about every-day tasks, such as getting dressed or preparing and eating food. Each question is scored from a scale of 0 to 12 by a health professional, with 0 meaning no difficulty is experienced, and 12 meaning the most severe.
From November 2026, people will need to score at least four points for one activity to qualify for support, instead of being able to qualify through lower scores across a broad range of tasks. Currently, to get this main component of PIP, you need 8-12 points in total, but the changes will mean that you will also need 4 points or more on a single activity.
Other Changes to Benefits
The Work Capability Assessment will be scrapped in 2028, with the Government instead consulting on a new single assessment based on the PIP system.
A new Unemployment Insurance benefit is to be introduced for those with recent employment history to provide short-term support between jobs without being subject to means testing. This would replace Jobseeker’s Allowance (JSA) and Unemployment and Support Allowance (ESA) into a single new benefit, to be paid at the current rate of ESA of £138 a week.
The government has stated:
“[these changes] will end years of inaction, which has led to one in eight young people not currently in work, education or training and 2.8 million people economically inactive due to long term sickness – one of the highest rates in the G7.
The number of people receiving one of the main types of health and disability benefit, Personal Independence Payments (PIP), has also risen rapidly and is becoming unsustainable.”
MoneySavingExpert commented:
“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”
For further information on benefit changes, and all other announcements from the Spring Statement, you can read it in full here.