Work and Pensions Secretary Liz Kendall announced the overhaul today (Image: Getty)
Work and Pensions Secretary Liz Kendall has confirmed the date that changes to the benefits system saving taxpayers ￡5 billion will come into effect. Making a long-awaited benefits announcement, she confirmed that the Government will not cut or freeze Personal Independence Payments (PIP), which go to people with a long term illness - but the benefit will become harder to get from November 2026.
This will save ￡5bn from 2029-30, she said. People will need to score a minimum of at least four points in the assessment to confirm they need PIP, she says, making it harder to get than now. And benefits will also be cut for young people, as the extra payment in Universal Credit for people who have health conditions will not become available to people under the age of 22.
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This means that younger people won’t get it, and the aim is ensure they get a job or do training. Ms Kendall says this will save ￡1 billion, and the money will go into extra employment support for young people “so every young person is working or learning and on a pathway to success.”
READ MORE: Labour unveils ￡6bn benefits crackdown despite backbench revolt [LIVE BLOG]
Ms Kendall said: "We believe that unleasing the talents of the British people is the key to our future success”
She said the social security system “is failing the very people it is supposed ot hekp and holding our country back”.
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One in ten people of working age is now claiming a sickness or disability benefit she warned. One in eight young people are no tin education, employment or training.
And the number claiming Pip set to double from 2m to 4.3m. “Millions of people who could work trapped on benefits”, she said.
And it means taxpayers are paying ￡20bn more since the pandemic, and the number set to rise an extra ￡18bn to ￡70bn a year by the next election if nothing is done, she said.
The Office for Budget Responsibility has forecast that spending on health and disability benefits for working-age adults will increase from ￡48.5 billion in 2023/24 to ￡75.7 billion in 2029/30.
The Government hopes to save up to ￡6 billion from the bill as Chancellor Rachel Reeves struggles to balance the books in the face of weak economic growth and mounting debt interest costs.
Department for Work and Pensions figures on Tuesday showed a total of 3.66 million claimants in England and Wales were entitled to personal independence payments as of January 31.
This is up 12% from 3.27 million a year earlier in January 2024 – and 71% higher than the equivalent figure five years ago.
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The Cabinet is united behind efforts to slash the welfare bill according to one of Sir Keir Starmer’s closest allies, despite anger from some Labour MPs.
Pat McFadden, the Chancellor of the Duchy of Lancaster and a key figure behind the scenes in the Starmer administration, insisted the plans were “entirely in line with the values of the Labour Party”.
Reports have suggested there is unease around the Cabinet table, with ministers including Deputy Prime Minister Angela Rayner and Energy Secretary Ed Miliband said to have voiced concerns in private.
But Mr McFadden said: “I believe the Cabinet is united behind taking on the issue of the growing benefits bill.”
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He told Times Radio the current system “leaves too many people in a permanent state of dependence on benefits without the opportunity of work”.
He said: “We want people, if they’re on long-term sickness benefits, not to languish there forever, but to be reassessed.
“There have been too few reassessments in recent years.”