The Universal Credit and Personal Independence Payment Bill 2024-25 was introduced on 18 June 2025. It is bill 267 of the 2024–25 parliamentary session and is scheduled to be considered by a committee of the whole House, and then to have third reading, on 9 July 2025.

The Commons Library will publish a full and updated research briefing on the progress of this bill after it has completed all stages in the House of Lords.

Summary of developments with the bill

The bill as introduced would have implemented two changes announced in the March 2025 green paper Pathways to Work: Reforming Benefits and Support to Get Britain Working that would have reduced spending on health and disability benefits by:

  • ‘rebalancing’ Universal Credit (UC) rates by increasing the basic ‘standard allowance’ all claimants receive, while reducing the generosity of the additional amounts for claimants with disabilities and health conditions that affect their capability for work
  • introducing changes designed to target Personal Independence Payment (PIP) at people with the most severe conditions through a new requirement for claimants to score four or more points for at least one of the ‘daily living’ activities that determine entitlement to the daily living component (the ‘four-point’ rule)

However, in advance of second reading on Thursday 26 June 2025 the government announced it would table amendments to the bill (PDF) so that:

  • All existing UC claimants with limited capability for work and work-related activity (LCWRA) at 5 April 2026, and new claimants after this date with a terminal illness or a severe, lifelong condition who are not ever expected to work, would see the combined rate of their UC standard allowance and health element increase at least in line with inflation in each year from 2026/27 to 2029/30.
  • All existing PIP claimants at the point when the PIP changes were expected to come into force (not before November 2026) would be exempt from the four-point rule. The four-point rule would therefore only have applied to new PIP claimants from then onwards.

More details were given in a Department for Work and Pensions (DWP) press release on 30 June 2025.

At second reading of the Universal Credit and Personal Independence Payment Bill on 1 July 2025, the government announced it would make further changes to the bill. It said it would table an amendment in committee to remove the provisions in the bill relating to PIP (clause 5), and only make changes to PIP eligibility activities and descriptors following a review of the PIP assessment being led by the Minister for Social Security and Disability, Sir Stephen Timms.

The terms of reference for the Timms review of the PIP assessment (PDF) have now been published. The review will be “co-produced” with disabled people, the organisations that represent them, clinicians, experts, MPs, and other stakeholders. The DWP says it will “engage widely over the summer to design the process for the work of the review, including to ensure that expertise from a range of different perspectives is drawn upon.” The government expects the review to conclude by Autumn 2026.

If the government amendments tabled for committee stage are agreed, the bill would only include the revised UC rates ‘rebalancing’ measures. The bill’s short and long titles would also be amended to remove references to PIP, so that the bill would become the Universal Credit Bill.

What was included on UC in the bill as introduced?

Provisions in the bill as introduced would have meant that:

  • new and existing UC claimants would receive an uplift above inflation in their UC standard allowance every year from 2026/27 until 2029/30
  • existing LCWRA claimants and new claimants with 12 months or less to live or with a severe, lifelong condition who are not ever expected to work, would receive the current rate of the UC health element (£97 a week), frozen until 2029/30
  • all non-protected claimants newly determined to have LCWRA from 6 April 2026 onwards would receive approximately half of the current health element rate (£50 a week), and this would also be frozen until 2029/30
  • the limited capability for work (LCW) element (a lower addition for people with less severe limitations, which has not been paid for new claims since April 2017) would also be frozen at the current rate until 2029/30

For further details see the Commons Library research briefing on the bill as introduced: Universal Credit and Personal Independence Payment Bill 2024-25.

What does the revised UC ‘rebalancing’ package include?

The changes announced on 26 June 2025 would not affect the plans to increase the UC standard allowance over and above inflation up to 2029/30. They would, however, maintain total UC support in real terms for existing UC health recipients on 6 April 2026, and for new claimants with 12 months to live or with a severe, lifelong condition who are not ever expected to work. The changes would mean that:

  • existing LCWRA recipients and new claimants with 12 months or less to live or a severe, lifelong condition who are not ever expected to work will see their standard allowance combined with their health element rise at least in line with inflation every year from 2026/27 to 2029/30, through a combination of increases to the standard allowance and the health element rate
  • LCW claimants will see the combined rate of their UC standard allowance and LCW element rise at least in line with inflation

These concessions do not affect new UC claimants from 6 April 2026, unless they have a terminal illness or a severe, lifelong condition and are not ever expected to work. For new, unprotected claimants who qualify for the LCWRA element, it would be paid at approximately half the rate existing claimants received, frozen until 2029/30.

Further details are given in Annex B to a ‘Dear Colleagues’ letter of 30 June 2025 from the Minister for Social Security and Disability, Sir Stephen Timms, to MPs.

Impact of the remaining package of UC changes

On 7 July 2025 the DWP published:

The Impact Assessment estimates that 200,000 new, unprotected claimants would receive the new, lower rate of the UC LCWRA element in the first year (2026/27), rising to 750,000 claimants in 2029/30. The numbers would increase further in subsequent years as new unprotected claimants after April 2026 comprise a larger proportion of the UC health caseload.

Savings from the UC LCWRA element measures are estimated at £480 million in 2026/27, rising to just over £2 billion a year in 2029/30. Increases in the UC standard allowance are estimated to cost £810 million in 2026/27, rising to £1.85 billion in 2029/30. In the first two years, UC rebalancing is therefore expected to have a net cost. In the following two years, there would be a net annual saving, which is estimated to be £210 million in 2029/30.

 

Source: Universal Credit Rebalancing impact assessment – GOV.UK

The DWP’s poverty analysis estimates that 50,000 fewer individuals (children and working-age people) would be in relative poverty in Great Britain in 2029/30 as a result of the modelled changes, compared to baseline projections. The baseline assumes, however, that the previous Conservative government’s planned changes to the Work Capability Assessment (WCA) activities and descriptors, which the current Labour government decided not to implement, have been introduced as originally planned. These WCA changes were expected to deliver total savings of around £3.8 billion for the period up to 2029/30 (see section 5.1 of the Commons Library research briefing on the bill as introduced for further information).

As well as modelling the impact of changes to the UC LCWRA element and the standard allowance, the poverty analysis also models the impact of reversing the previous Conservative government’s planned WCA changes. The modelling does not, however, include the impact of the additional £1 billion a year the current government has announced for employment support measures by 2029/30, or the additional £300 million for employment support that the government is bringing forward for 2027/28 and 2028/29 (for details see the ‘Dear Colleagues’ letter of 30 June 2025 from Sir Stephen Timms to MPs).

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