The UK government has introduced a major welfare reform called the Universal Credit and Personal Independence Payment (PIP) Bill, aiming to modernize the benefits system.
While the government presents this as a long-term solution to keep the system sustainable and offer a Guaranteed Income Boost, disability rights groups argue it could reduce essential support, especially as living costs continue to rise.
Let’s unpack what’s changing, who wins, who loses, and how it affects everyday people.
Table of Contents
Increases
Starting April 2026, the Universal Credit (UC) standard allowance will rise each year, outpacing inflation for four years. This increase targets single adults over 25 and families without complex health issues.
Here’s what the yearly rise looks like:
| Year | Annual Increase (%) | Estimated Benefit per Family |
|---|---|---|
| 2026–2027 | 2.3% | ~£140 |
| 2027–2028 | 3.1% | ~£195 |
| 2028–2029 | 4.0% | ~£230 |
| 2029–2030 | 4.8% | ~£275 |
By 2030, a family could gain up to £725 in extra support, the highest benefit increase in UC history.
Cuts
While Universal Credit is getting a boost, some health-related benefits are being cut. A major reduction hits the Limited Capability for Work and Work-Related Activity (LCWRA) component.
LCWRA Changes
| Group | Weekly Rate |
|---|---|
| Current claimants | £97 (unchanged) |
| New claimants (from April 2026) | £50 |
This affects new applicants with cancer, terminal illnesses, or long-term serious conditions. The near 50% cut only applies to new claims, meaning many who fall sick after 2026 may get far less help.
Exemption
To calm the backlash, a new exemption category has been introduced for people with lifelong or severely disabling conditions.
Key features include:
- Over 200,000 people will avoid reassessments
- They will continue receiving the full £97 per week LCWRA rate
- Intended to bring mental stability and financial consistency
However, critics say the category is too narrowly defined and may exclude people with unstable or “invisible” disabilities.
PIP
The rules for claiming Personal Independence Payment (PIP) are being tightened under this new bill. Getting help will become harder.
New rules include:
- Applicants must now score at least 4 points in a daily-living activity
- A 13-week transitional protection period is offered to those exiting or switching benefits
Though framed as a simplification effort, many believe these changes may exclude people with moderate but genuine needs.
Impact
Let’s break down who stands to gain and who might lose under the new bill:
| Category | Financial Impact |
|---|---|
| General UC claimants | Up to £725 over 4 years |
| New health-related claimants | ~£47 per week less |
| Severely disabled (exempt) | £97 per week, no reassessment |
| Government savings | Up to £5 billion annually |
Low-income families without health conditions will benefit most, while many disabled individuals may face reduced support unless they qualify under the strict exemption.
Opposition
Disability advocacy groups are not holding back. James Watson-O’Neill, CEO of Sense, summed it up: “The reduction in support for those who are facing the greatest difficulties is particularly worrying.”
Common concerns include:
- Increased pressure due to rising energy and food costs
- More dependence on food banks and emergency services
- Gaps in support for people who are not ‘disabled enough’ to qualify for protection
Employment
The bill isn’t just about cuts—it also pushes for increased employment through a program called Pathways to Work, backed by a £1 billion investment.
Features of the program:
- Personalised job coaching and skills training
- The “Right to Try” lets people test part-time work without losing benefits
- Support for flexible and remote job opportunities
The goal is to encourage those who can work to gradually rejoin the workforce, reducing dependency on benefits long term.
This reform is clearly a balancing act. The government aims to support working families and control rising welfare costs, but there’s a real risk that the most vulnerable may fall through the cracks. Its success or failure will depend entirely on how fairly and carefully it’s rolled out.
FAQs
When will Universal Credit increases start?
Increases begin from April 2026 and continue yearly till 2030.
How much will Universal Credit increase by 2030?
Up to £725 per family over four years.
What is the new LCWRA rate for new claimants?
New claimants will get £50 per week starting April 2026.
Will severely disabled people be reassessed?
No, they’re exempt and will keep £97 per week.
What’s the goal of Pathways to Work?
To help unemployed people find flexible or part-time work.
