A proposed freeze on Personal Independence Payments (PIP) in 2026 could lead to significant financial losses for some claimants, potentially exceeding £350 annually, according to recent analysis. The government is set to announce over £6 billion in welfare savings this week, which may include a decision to halt the inflation-linked increase of PIP starting from April next year.
Typically, PIP payments are adjusted annually in accordance with the consumer prices index (CPI) inflation rate from the previous September. These payments are crucial for individuals who have long-term health conditions or disabilities that impede their ability to perform essential daily tasks or to mobilize effectively.
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For those affected, a freeze in benefits during a period when inflation is expected to significantly exceed the Bank of England’s target of 2 percent will mean that claimants will effectively receive less in real terms than they would have otherwise. PIP payments are categorized into different rates based on the severity of a person’s condition and consist of daily living and mobility components.
Currently, individuals receiving the enhanced rate for both components can obtain a total of £184.30 per week—£108.55 for daily living and £75.75 for mobility. This amount is expected to rise to £187.45 per week, with £110.40 and £77.05 allocated for each component, starting from April this year, in line with last year’s inflation figure of 1.7 percent.
How are PIP rates determined?
During the assessment for PIP, a healthcare professional evaluates an individual’s capacity to execute daily living activities and mobility tasks. Each component of PIP is scored out of 12. A score between 8 and 11 qualifies for the standard rate, while a score of 12 secures the higher rate. For instance, Citizens Advice illustrates that a person who can walk up to 50 meters with a walking stick but is unable to repeat this due to exhaustion and pain would score 12 in the mobility segment, thus qualifying for the higher mobility component of PIP.
Forecasts suggest that payments would typically increase by an additional 3.7 percent—the Bank of England’s projected inflation rate for the third quarter of 2025—from April 2026. This could potentially raise the higher daily living rate to £114.50 and the mobility rate to £79.90. If the Department for Work and Pensions (DWP) proceeds with the freeze, claimants could face a loss of £361.40 annually in real terms. Similarly, individuals receiving the standard rate for each component might lose approximately £200.20 per year, presuming they would have otherwise qualified for a 3.7 percent increase.
This analysis emerges as Work and Pensions Secretary Liz Kendall prepares to outline plans for welfare cuts aimed at managing the significant rise in health-related benefits. In January, Kendall remarked that the UK welfare budget needs to be adjusted to a more sustainable trajectory, stating, “The way to do this is to get more people into work through the reforms that we’re putting in place in our Jobcentres and through reform of the benefit system. We’ll be bringing forward our green paper on reforming sickness and disability benefits in the spring.”
As of October last year, the number of individuals claiming PIP in England and Wales reached 3.6 million, highlighting a substantial increase in the benefits bill since the onset of the Covid pandemic. Additional reforms are reportedly in the works, including £5 billion in savings by tightening the qualification criteria for PIP, as per ITV News.
Claimants of PIP present a diverse array of conditions, ranging from skin diseases to mobility challenges, yet there has been a notable increase in claimants with psychiatric conditions since the pandemic. Importantly, PIP can be claimed in conjunction with other benefits and is accessible to individuals who are employed.
Historically, freezing benefits has been a strategy employed by governments to reduce welfare expenditures. Between 2013/14 and 2019/20, the value of most benefits was adjusted by less than inflation annually under both coalition and Conservative governments.
The forthcoming changes could also entail an increase in the basic rate of Universal Credit for those seeking or currently in employment, while reducing the rate for individuals deemed unfit for work. Both Kendall and Chancellor Rachel Reeves have indicated that there may be cuts to benefits for unemployed young people who are not actively looking for work. In a recent interview with ITV News, Kendall expressed concerns about individuals “taking the mickey” by claiming benefits without seeking employment.
The DWP has been contacted for further comments regarding these developments.
