What are the benefits and Universal Credit changes outlined in the Spring Budget 2025?
26 March 2025, 14:58
Rachel Reeves confirmed changes to PIP and Universal Credit claims in parliament in today's speech but what are the cuts? And what exactly is the health element?
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The Spring Budget 2025 was delivered in parliament by Rachel Reeves on March 26th where she outlined a welfare reformation in order to save the UK billions of pounds.
From Personal Independence Payments (PIP) to Universal Credits (UC), the Chancellor of Exchequer laid out plans on how the Labour government would be helping more people back into the workplace while saving the economy £4.8billion.
She said: "If you can work, you should work. More than 1,000 people qualify for PIP every single day. And one in eight young people are not in employment, education or training."
READ MORE: Rachel Reeves' Spring Statement - What the changes mean for you
So what is happening to Universal Credit claims and what are the cuts? How will the new PIP rules affect people? And what exactly does the 'health element' to UC mean? Here's the latest benefit cuts explained.
What is happening to Universal Credits?
From April 2026, Universal Credit will see the standard allowance rise for new and existing claims. The amount for a single person aged 25 and over will increase from £92 a week to £106.
However, the big announcement from Rachel's speech was the fact the health element of Universal Credit (which you get because sickness and disability prevents you from working) will change.
For those making new claims under this category from April 2026, their money will be halved to £50 a week in 2026/27 and frozen at this amount until 2029/30. Anyone with severe, life-long health conditions will be protected through an "additional premium".
For those already claiming this UC health element they will have their money frozen at £97 a week until 2029/30.
Additionally, anyone receiving the health element under the age of 22 will no longer be able to.
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What are the PIP changes outlined in the Spring Budget 2025?
From November 2026, the eligibility criteria for PIP payments will be changing.
Currently assessed on a points system - where the more difficulty you have to work the more points you get - it will change slightly so that applicants will need to score more in certain areas to be able to claim.
To be able to remain eligible for the extra income, applicants must also score a minimum of four points for a single activity within the system. This means they must experience extra difficulty when it comes to areas such as washing or dressing or others.
This extra benefit is in place to help those with disability or long-term illnesses that prevent them from working.
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