Published by Global Banking & Finance Review®
Posted on March 26, 2025
3 min readLast updated: January 24, 2026
Add as preferred source on GoogleUK welfare cuts could push 250,000 into poverty by 2030, affecting families and disabled individuals, despite government mitigation plans.
By Catarina Demony
LONDON (Reuters) - Welfare cuts announced by Britain on Wednesday will drive 250,000 into relative poverty by the end of the decade and leave millions of families with less cash, according to the government's own estimates.
However, it said the estimates did not take into account new government policies that will support those with disabilities and long-term health conditions into work, mitigating the poverty impact.
As part of finance minister Rachel Reeves' half-yearly budget update speech to parliament, she confirmed the Labour government would cut welfare, including support for people with illnesses and disabilities, by a total of 4.8 billion pounds ($6.19 billion) over the next five years.
"We are confident the changes that we are making, the support we are providing to get people into work, will result in more people having fulfilling careers, paying decent wages ... that's the best way to lift families out of poverty," Reeves told a press conference.
The government said 1 in 10 people of working age were now claiming a sickness or disability benefit.
In its impact assessment of the changes, the government estimated 50,000 of the 250,000 expected to be pushed into relative poverty were children.
The government refers to relative poverty, which takes into account housing costs, as describing people living in households with income below 60% of the median in that year.
"These looming benefit cuts will drive even more people into poverty, not lift them up," said Clare Moriarty, chief executive of Citizens Advice, an organisation assisting people with issues such as debt and housing.
The government estimated that under the plan, 800,000 people would not receive the "daily living" component of the Personal Independence Payment (PIP), a cash benefit currently paid to 3.6 million people with health problems and disabilities in Britain, by 2029-30.
"It's a political choice to try fixing the public finances by cutting the incomes of disabled people," said Sarah Hughes, CEO of mental health charity Mind.
The government said it would always support those with long-term health conditions through PIP but its reforms would "make the system more targeted and sustainable to ensure the safety net is there for those who need it most".
According to a poll by YouGov this month, 68% of Britons believe the benefits system works badly and needs reform.
James Taylor, from disability charity Scope, said the government was "rushing to make further cuts with no thought to the impact on disabled people".
The government's assessment estimated by the end of the decade there would be 3.2 million families receiving disability benefits – both current and future recipients - who will experience an average loss of 1,720 pounds ($2,217) per year.
($1 = 0.7762 pounds)
(Reporting by Catarina Demony; Additional reporting by Sam Tabahriti; Editing by William James and Alison Williams)
The UK government's estimates suggest that 250,000 people will be driven into relative poverty by the end of the decade.
Relative poverty refers to individuals living in households with an income below 60% of the median income in that year, accounting for housing costs.
The government claims it will support individuals with long-term health conditions through the Personal Independence Payment (PIP), although reforms are intended to make the system more targeted.
Advocacy groups like Citizens Advice and Mind argue that the cuts will exacerbate poverty and harm disabled individuals, criticizing the government's approach to public finances.
According to a recent YouGov poll, 68% of Britons believe that the benefits system works poorly and requires reform.
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