There has been much comment on the Chancellor’s decision to make access to Personal Independence Payments (PIP) harder, to reduce the welfare budget. Alongside the need to adhere to the fiscal rule set, the rationale given is that the projected growth of PIP payments over the next 10 years is deemed “unsustainable.”
That word always makes me want to dig deeper, so I did. Projections are at the root of these cuts, together with the government’s failure to accept post-pandemic impacts on the nation’s physical and mental health.
Disability payments and growth projections?
The basis of the “unsustainable claim” is the projected growth of PIP claims. As of 30 April 2024, there were 3.8 million claimants entitled to PIP in England, Wales, and Scotland. Individuals in the UK with health conditions may be entitled to two types of benefits:
- incapacity benefits – now primarily known as Employment and Support Allowance (ESA) (for those whose condition may prevent them from working); and
- disability benefits (to help with extra living costs arising from the disability or PIP).
The growth in PIP payments is part of the upward overall trend in ‘disability’ payments.
According to the Institute of Fiscal Studies (IFS) 2020-2024, there has been a significant increase in spending on people of working-age health-related benefits, from £36 billion in 2019–20 to £48 billion in 2023–24. Official forecasts expect this spending to increase further to £63 billion in 2028–29 (all in 2024–25 prices.)
Total health-related welfare for all ages has increased from £52 billion in 2019–20 to £65 billion in 2023–24. The increase in working-age spending has been primarily driven by the rise in incapacity benefits claims, from 2.2 million in 2019–20 to 3.2 million in 2023–24, representing a 28% growth. The Office of Budget Responsibility is ever more pessimistic about future costs. Will growth continue?
Why have claims grown?
This increase requires some analysis to understand. Rapid growth is predominantly a UK phenomenon, resulting in a health-related benefits bill that is high by UK standards but comparable to those of similar countries. However, the concern is that if spending on health-related benefits continues to grow (as forecast) to 2.1% of GDP in 2028, the UK will likely become one of the highest spenders on health-related benefits among comparable countries. The key issue, therefore, is whether the projections are correct.
The pandemic was a mass health shock; there were an estimated 44 million Covid-19 cases. The PIP increase started after the pandemic hit. More people are now claiming, and fewer are ending their claims. Those figures began to rise in mid-2021. According to the latest data (as of November 2023), nearly 500,000 people began claiming disability benefits, and it seems ‘Long Covid’ must be part of the explanation.
In March 2023, an estimated 1.9 million people in the UK reported that they were experiencing Long Covid, representing 2.9% of the population. Of these, 1.3 million had symptoms that had lasted for more than a year, and 762,000 had symptoms lasting for more than two years. Anxiety and depression can be part of the symptoms of Long Covid. But the PIP data is not all Long Covid-related.
More than half of the rise since the pandemic is due to more claims relating to mental health or behavioural conditions. 1.3 million people claim disability benefits primarily for mental health or behavioural conditions – 44% of all claimants. A recent Department of Work and Pensions (DWP) survey suggests 86% of those incapacity and disability benefit claimants report having a mental health condition (even if it is not their primary condition). The age profile of PIP claimants is changing too. There are more younger claimants. Regionally, the data is skewed towards areas of social deprivation.
There is also the issue of the impact of the increase in the State Pension Age (SPA), which has shifted applicants onto health-related benefits to compensate for pension losses. The Pensions Act 2007 legislated to increase the SPA for both men and women to 66 between 2024 and 2026. The Pensions Act 2011 accelerated the timetable for equalising SPA for women to 65, bringing forward the increase in SPA to 66 between 2018 and 2020. If you are too old and ill to work, improving your Universal Credit (UC) with disability payments makes individual sense.
What triggers a PIP claim?
The DWP itself has researched the triggers for claiming PIP; these are often combinations of health conditions including both mental and physical conditions. Health deterioration, financial hardship and employment concerns were the primary triggers. People cited daily living, utilities, household costs and transport as their intended uses for PIP. Clearly, the context in which people are surviving changes their needs.
So the growth in these welfare payments appears to be comprised of genuine claimants, as the application process is both challenging to navigate and many are rejected. So why has Labour responded by trying to change the criteria for application and targeting those of working age with mental illness?
Why is mental health the challenge?
International studies show that the UK is a relatively unhappy place compared to the Nordic countries (23rd place in the World Happiness Report 2025), as well as a challenging environment in which to thrive. We have just suffered major shocks from the pandemic and the cost-of-living crisis caused by the Russian invasion of Ukraine, and many are now economically ‘insecure’. So are we at all surprised that people are struggling?
The UK’s mental health provision is also dire, and demand for – often non-existent – mental health services increased to 5 million referrals in 2023. The suicide rate is also growing, with over 6000 registered deaths in 2023. The costs are huge both in terms of human misery and economically. The charity Mind estimates the cost to the economy is £300 billion a year.
So, if you are feeling unable to cope with a cost-of-living and or a housing crisis, a poor work environment or unemployment, and suffer mental health problems, what is the response? Therapy is not always available, so ‘get back to work’ is the Labour government’s solution for those failing in life’s lottery.
Political choices
I am not sure that using a big economic stick to get people off the sofa is the solution I would choose. But then again, maybe I am being unfair: the DWP has research that says 44% of people with a mental health condition expect to be able to work in the future, if their health improves. Does work itself make you less depressed?
Simply, it’s all about the country’s economic choices. The Chancellor is battling the fiscal rules set, a turbulent global economy, trade tariffs and a world where war is more likely. Whatever the pressures on the government to balance its budget, they seem to me not to be as terrifying as the ones people live under day-to-day, when there isn’t enough to go around, and someone needs to be blamed.
