IFS suggests means-testing disability benefits could trim £8 billion from UK welfare spending

According to a fresh Institute for Fiscal Studies study, integrating Personal Independence Payments into the means-tested Universal Credit programme could slash the UK disability-benefits budget by roughly a third, yielding an initial £8.2 billion saving. The paper suggests that eliminating PIP for all under-30s would save £5.5 billion a year, while a more targeted approach—limiting it to those with the most severe conditions—could still cut £2.2 billion annually.

Over time, the IFS notes that behavioural responses may reduce the net saving as more people claim Universal Credit to retain PIP, yet a large fiscal benefit would persist. The analysis follows Department for Work and Pensions data showing PIP spending rising from £14 billion in 2019-20 to £25 billion in 2025-26, with forecasts of £34 billion by 2030-31. Labour’s previous attempt to trim the disability bill by £5 billion was blocked by a backbench rebellion, prompting a review by social-security minister Sir Stephen Timms. A separate Re:State report highlights that Britain’s disability-benefit generosity far exceeds that of comparable nations.