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“Disabled people are already financially disadvantaged – health-related benefits are essential to many that receive them" - Living standards expert explains the implications of planned welfare cuts

The government has now confirmed their plans, unveiled last week (18 March), to deliver £4.8 billion in savings by making changes to the welfare system. These changes are presented as the largest reform to the country’s welfare system for a generation.

Katherine Hill, a Research Fellow within Loughborough University’s Centre for Research in Social Policy, whose research focuses on living standards, low income and disadvantage, explains a little more about the impact that the proposed changes could have for those at risk of losing the support.

“Disabled people are already financially disadvantaged – they face a higher poverty rate than non-disabled households and are more likely to use a food bank - so health-related benefits are essential to many of the households that receive them. The Government’s proposed ‘savings’, mean cuts that will reduce the number of people claiming health-related benefits, as well as the amounts that people receive. The DWP’s own impact assessment estimates that  3.2 million families will lose on average £1720 per year.”

Katherine also explains how benefits such as these are vital to some households, due to the low level of UK basic working age benefits.

“For people who are unable to work, or at least for a while, the additional health-related element is essential for low-income households in boosting Universal Credit. Out of work benefit levels are inadequate compared to day to day living costs, never mind covering additional expenses that crop up over time. They fall far short of the Minimum Income Standard, which considers replacement costs of things and allows for a ‘more than just survival’ quality of life.

“While the announced small increase in the value of the standard Universal Credit allowance is welcome, this will be far outweighed by a freeze of the health-related element of Universal Credit for existing recipients, and the halving in its value for new claimants. Looking ahead, some will lose out altogether if they do not qualify when the Work Capability Assessment is replaced by eligibility to PIP.”

Katherine highlights that households claiming the disability-related benefit – Personal Independence Payments (PIP) for working-age – do so to help with additional costs arising from a disability or health condition.

“It’s important to recognise that disabled people can face significant higher costs, whether for specialised equipment and support, or increased everyday costs like extra heating, washing, and needing a taxi to get around. The proposed tightening of eligibility to PIP (daily living component), will inevitably mean that some people will not qualify, limiting their ability to meet these additional needs and costs, with potential implications for their quality of life and independence.

“There are wider impacts too, as PIP can be a ‘gateway’ to other benefits, such as Carers Allowance, which if lost could further reduce household income.”

In support of their plans to reform the welfare system, the government pointed to the comparatively high rates of people who are not in work and classed as long-term sick, and the rise in young people not in employment, education and training. So, alongside cuts to benefits, they are focusing on helping people move into work, with an additional £1 billion a year by 2029/30 for personalised employment, health and skills support. Proposals also include the right to ‘try’ work, without the fear of losing health-related benefits should it not work out.

Considering these figures, Ms Hill notes that although these support measures are welcome, acknowledging wider issues affecting people’s health and well-being and ability to work is important.  

“Mental health is a key factor in new claims for health-related benefits. This reflects the rising rates of mental health conditions across the UK adult population, particularly for younger people. With increased need and stretched resources, mental health services haven’t been able to keep pace with demand, and while people are waiting to access services their mental health can deteriorate, impacting on their ability to work.

 “Given that the State Pension age has increased, there will naturally be more people at the older end of working age who are more likely to have poorer health, and this number will continue to increase.

“Work also needs to be appropriate and sustainable, and importantly involve employers’ buy in and flexibility. For example, if someone needs workplace adjustments or has a fluctuating condition.”

“Overall, while the proposed measures will help some people move into work, these are likely to be overshadowed by the financial impact of benefit cuts, and the additional strain and anxiety this entails.”

To arrange an interview with Katherine Hill, email publicrelations@lboro.ac.uk.

Notes for editors

Press release reference number: 25/51

About Loughborough University 

Loughborough is one of the country’s leading universities, with an international reputation for research that matters, excellence in teaching, strong links with industry, and unrivalled achievement in sport and its underpinning academic disciplines. 

It has been awarded five stars in the independent QS Stars university rating scheme and named the best university in the world for sports-related subjects in the 2025 QS World University Rankings – the ninth year running. 

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