Government analysis shows that 3.2 million families are expected to be financially impacted by the new welfare cuts, with an average loss of £1,720 per year compared to inflation.
The Department for Work and Pensions published its impact statement on the welfare cuts following the Spring Statement.
The most significant estimated impacts (in 2029/30) will come from changes to Personal Independence Payment (PIP) entitlement rules. Over 370,000 current recipients are expected to lose entitlement (when they have an award review), along with 430,000 future PIP recipients who will not now get the PIP they would otherwise have been entitled to. The average loss is £4,500 per year.
Changes to the universal credit health element will impact over 2.25 million current recipients, with an average loss of £500 per year, and 730,000 future recipients of universal credit health, with an average loss of £3,000 per year.
The increase in the standard allowance is expected to benefit some 3.9 million households not on the universal health element, with an average gain of £265 per year.
In addition, it estimated there will be an additional 250,000 people, which includes 50,000 children in relative poverty after housing costs in 2029/30 as a result of modelled changes to social security,
compared to the baseline projections.
The DWP adds that this analysis includes some current recipients and some future recipients and does not include the impact of the £1 billion a year, by 2029/30, funding for measures to support those with disabilities and long-term health conditions into employment, which it expects to mitigate the poverty impact among people it supports into work.
It says that the reforms are expected to make welfare savings of £4.8 billion by 2029-30, £4.5 billion of which will be in working-age sickness and disability benefits.
This analysis uses the most up-to-date model available at the time of writing, which is consistent with the Office for Budget Responsibility’s (OBR) March 2025 economic and fiscal forecast.
