The British government is preparing to implement over £6 billion in welfare savings, according to a report from ITV News on Friday. This move comes as Finance Minister Rachel Reeves works
to balance the nation’s finances.
Reeves is set to deliver her Spring Statement on March 26. However, economic challenges since the October budget mean she must identify additional funds to comply with strict fiscal rules. Concerns over slowing economic growth and potential U.S. tariffs have added to financial pressures.
Speaking on Tuesday, Reeves criticized the previous Conservative government, which was in power for 14 years until July 2024, stating that the welfare budget had "got out of control." A leading think tank has suggested she faces a choice between raising taxes or reintroducing austerity measures.
According to ITV, the government plans to achieve billions in welfare savings by tightening eligibility criteria for Personal Independence Payments (PIP), a disability benefit. Additionally, PIP payments will be frozen next year, meaning they will not increase in line with inflation.
Other planned changes include raising the basic rate of Universal Credit for those actively seeking employment or already in work, while reducing payments for individuals deemed unfit to work.
The Office for Budget Responsibility has projected that the cost of disability and incapacity benefits will rise to £100 billion ($128 billion) annually by 2029/30. Reeves has set a goal of balancing day-to-day government spending with tax revenues by then.
The Resolution Foundation, a think tank focusing on low-income households, advised on Thursday that the government should target reductions in health and disability benefits rather than restricting eligibility.
Meanwhile, the government announced on Thursday that it would enhance employment support programs to help sick and disabled individuals return to the workforce.