Universal Credit and Personal Independence Payment Bill 2024-25

This briefing covers the Universal Credit and Personal Independence Payment Bill 2024-25 as it was introduced to the House Commons on 18 June 2025. The briefing was published on 27 June 2025, in advance of the bill’s second reading on Tuesday 1 July 2025. On the day of publication, the government announced the following changes to the measures which would be introduced by the bill:

• the new Personal Independence Payment daily living ‘four-point’ requirement will only be implemented for new claimants from November 2026
• existing recipients of the Universal Credit health element, and any new claimant meeting the criteria for the most severe and lifelong conditions, will “have their incomes fully protected in real terms”

This briefing was written before this announcement and does not cover these changes.

The Universal Credit and Personal Independence Payment Bill 2024-25 was introduced on 18 June 2025. It is bill 267 of the 2024–25 parliamentary session and is scheduled for second reading on Tuesday 1 July 2025.

The bill would implement two changes announced in the March 2025 green paper Pathways to Work: Reforming Benefits and Support to Get Britain Working that would reduce spending on health and disability benefits by:

• ‘rebalancing’ Universal Credit rates by increasing the basic ‘standard allowance’ all claimants receive, while reducing the generosity of the aditional amounts for claimants with disabilties and health conditions that affect their capabilty for work
• introducing changes designed to target Personal Independence Payment (PIP) at people with the most severe conditions through a new requirement for claimants to score four or more points for at least one of the ‘daily living’ activities that determine entitlement to the daily living component

This briefing does not provide an exhaustive guide to every clause of the bill. The government has published a range of accompanying documents alongside the bill:

• explanatory notes
• an impact assessment for each of the two provisions
• a delegated powers memorandum

These can be found on the bill page for the Universal Credit and Personal Independence Payment Bill.

The current health and disability benefit system

The social security system supports people with health conditions or disabilities and their families in two main ways:

• ‘Income maintenance’ or ‘income replacement’ benefits, which are intended to cover basic day-to-day living expenses. These include Universal Credit (UC), and Employment and Support Allowance (ESA) across the UK. UC can include an additional ‘health element’ for adults whose condition limits their ability to work. These benefits are also known as ‘incapacity benefits’.
• Benefits which are intended to help with extra costs arising from ill health or disability. For people of working age, the main ‘extra costs’ benefit in England, Wales and Northern Ireland is Personal Independence Payment (PIP). Adult Disability Payment is replacing PIP in Scotland.

Department for Work and Pensions (DWP) spending on both disability and incapacity benefits for working-age claimants is estimated to be around £55.1 billion in 2025/26. Claims are forecast to rise in real terms to around £60.7 billion by 2029/30, a 10% increase.

Changes to Universal Credit rates

All UC awards include a standard allowance worth £400.14 a month for single people aged 25 and over, with different rates for couples and people under 25. Those with disabilities and health conditions which significantly affect their capability to work can also get a ‘health element’ of £423.27 a month.

The bill would increase the standard allowance above inflation over four financial years from 2026/27. By 2029/30, it would be 4.8% higher than it would have been under the normal practice of annual inflation-related increases.

The UC health element would be roughly halved for most new recipients from 6 April 2026 from £432.27 a month to £217.26, then frozen for four years.

Existing recipients entitled before 6 April 2026 would have their health element protected from this cash reduction, but it would still be frozen each year to 2029/30. New claimants claiming under special terminal illness rules, and people with the most severe and lifelong conditions would also receive this protected rate, even if they become entitled after April 2026.

The government argues this would “rebalance payment levels in Universal Credit to support people towards work, address perverse incentives and to start to improve basic adequacy” (PDF).

In 2029/30, 6.7 million UC claimants would benefit from the higher standard allowance, which would by then be over £21.10 a month higher for single claimants aged 25 and over than it would be without increases provided for in the bill.

However, for the vast majority of the 2.9 million households receiving a health element, the increase in the standard allowance would be more than offset by the reduction in the health element. Claimants receiving the unprotected health element rate would have significantly lower entitlements.

Personal Independence Payment changes

At present, PIP claimants can qualify for the daily living component by accumulating low scores across several of the 10 daily living activities in the PIP assessment.

The bill would introduce an additional requirement for claimants to score four or more points in at least one of the activities to qualify for the daily living component. In addition to saving an estimated £3.8 billion a year by 2029/30, the government says this approach “better targets support at people with more severe conditions.”

The government estimates that, as a result of this change, in 2029/30 around 800,000 people would not receive the daily living component of PIP who would have under the current rules. Of these, 370,000 would be current recipients losing entitlement following an award review, and 430,000 would be future PIP claimants. The average loss is estimated at £4,500 a year per claimant.

The DWP notes increasing spending on disability benefits (PDF) and argues the PIP changes would make social security spending more sustainable and focus public money on “those with the greatest need”. It says that otherwise there is a risk “the welfare state won’t be there for people who need it in future.”

DWP analysis suggests that people with physical conditions such as back pain or arthritis are most likely to be affected by the changes, while people with learning disabilities, autistic spectrum disorders and attention deficit hyperactivity disorder are least likely to be affected.

Welfare and disability rights organisations, including Trussell, Scope, Disability Rights UK, and Benefits and Work are opposed to the four-point rule, highlighting the scale of the reduction in spending on disability benefits and the effect on individuals. Some also question the government’s claim that the change would focus PIP on people with higher needs.

The Commons Work and Pensions Committee has also called on the government to delay changes to the PIP daily living criteria until a wider review of the PIP assessment, also announced in the Pathways to Work green paper, has ended. The Secretary of State for Work and Pensions, Liz Kendall, responded that the PIP review will “rightly take time and require extensive engagement” (PDF) and so the government “cannot wait for its conclusion to make the urgently needed changes to the PIP eligibility criteria”.

Overall savings and impact

The PIP changes are expected to save £3.8 billion in 2029/30, including knock-on effects on carers’ benefits and UC take up. The changes to UC rates are expected to save an additional £860 million. The combined saving from both measures in the bill is expected to be £4.7 billion in 2029/30. The Institute for Fiscal Studies estimates that the long-run savings could be around £10 billion a year.

The DWP published an impact analysis in March 2025 examining the overall effect of a range of disability benefit reforms announced in the Pathways to Work green paper, including the changes in the bill.

The impact analysis estimated that in 2029/30, 3.2 million households, including current and future recipients of health and disability benefits, would lose out financially as a result of the overall package, with an average loss of £1,720 a year. 3.8 million households would benefit financially, with an average gain of £480 a year.

The impact analysis also estimated that an additional 250,000 people in Great Britain, including 50,000 children, would be in poverty in 2029/2030 as a result of the health and disability benefit reforms analysed.

Territorial extent

Universal Credit is administered by the DWP across Great Britain, and by the Department for Communities in Northern Ireland. The provisions in the bill to change UC rates would apply across Great Britain, with corresponding provision also made for Northern Ireland.

The PIP changes would apply to England and Wales, with corresponding provision also made for Northern Ireland.

The PIP changes would not apply to Scotland, where extra-costs disability benefits are devolved. PIP in Scotland is being replaced by the Scottish Government’s Adult Disability Payment, a process which the UK Government expects will be complete by the time changes in the bill would be introduced.

Annex A to the bill’s explanatory notes provides more detail on the territorial extent of each clause.