The 2025 UK Budget was finally announced on the 26th of November, after countless leaks to the media. Its impact on disabled people will unfold in the year to come, but overall, it seems to present a mixture of sticking plaster politics. Firstly, not addressing the current barriers that are preventing disabled people from getting into work, and secondly, the increased living costs they are still facing.
Freelance writer Ellie May Forrester spent time reviewing and analysing the budget to see how it would impact disabled people.
Upcoming reforms will increase PIP rates but bring stricter assessments, especially for young and new claimants. Universal Credit health top-ups will be frozen or reduced, raising concerns about poverty and debt. Despite investment in employment schemes, significant barriers remain. Disability charities say the budget fails to address systemic inequality for disabled people.
Rachel Reeves had the opportunity to do more to improve SEND support in both mainstream and special schools. She chose instead to focus on providing playgrounds and libraries for every primary school. These are vital resources for schools, but if disabled children are not receiving the SEND support they are entitled to, how can they make full use of these facilities to thrive alongside other students?
One area of the budget that has received positive responses from welfare disability charities and teaching unions is the removal of the two-child benefit cap. The government believes that this will bring 450,000 children out of poverty by 2029 -30.
Rachel Reeves said: “These are my choices, the right choices, for a fairer, a stronger, and a more secure Britain.”
What does this budget mean for you?
PIP (Personal Independent Payments)
There will be changes to the PIP assessment, including more face-to-face assessments and fewer award reviews for those aged 25 or older. For example, the PIP and specific carers’ benefits will increase by 3.8%, reflecting the rise in inflation from April 2026:
Daily living component
- Standard – will rise from £73.90 to £76.70
- Enhanced – will increase from £110.40 to £114.70
Mobility component
- Standard – will increase from £29.20 to £30.30
- Enhanced – will rise from £77.05 to £79.90
There will be a greater impact on both new disabled claimants and those under age 25, as they will subsequently have more face-to-face assessments than their counterparts. This results in a two-tier benefit system in which, as of November 2026, new PIP claimants will face far stricter eligibility criteria.
The charity MS Society has broadly welcomed the changes to PIP. Its Policy Co-Chair of the Disability Benefits Consortium and Senior Policy Officer, Charles Gillies, said:
“Many disabled people, including those with long-term progressive conditions like MS, will welcome the reduction in Personal Independence Payment (PIP) reassessments – which are often stressful and unnecessary.”
The MS Society further added: “We welcome the inflationary increase to the incomes of people with MS who rely on these benefits to cover their essentials and extra costs. However, we know many people will still struggle financially, including people who are unable to work and rely on benefits like Universal Credit. The government must review these rates so that everyone can live free from poverty.”
Universal Credit
There are also changes to Universal Credit that will significantly affect what claimants receive. Current claimants will have their £97-per-week health top-up frozen, meaning that although the amount stays the same, rising prices will steadily erode its real value – effectively a cut over time.
New Universal Credit claimants with a health condition will face an even steeper loss: from April 2026, the health element for new claims will be reduced to £50 per week instead of the current £97. This is a £47-a-week reduction, amounting to roughly £188 less per month.
While the standard Universal Credit allowance will continue to rise with inflation, this increase will only partially offset the shortfall, leaving many disabled people and those with long-term health conditions substantially worse off overall.
Evan John, who works on disability policy for the charity, Sense, has pointed out that:
“We’re particularly worried about the Government’s proposal to cut the Health Element of Universal Credit for disabled people aged 16 to 21. That would mean young disabled people who apply for benefits in the future would be eligible for £50 a week less in support. The impact of that would be huge.”
Furthermore, findings by Sense have found that 43% of disabled people with complex needs on benefits are in debt due to their welfare payments not being enough for essentials.
Research by the Trussell Trust found that two-thirds of disabled people relied on food banks in 2024. It was bleakly illustrated last year in Heather Buckingham’s article in The Big Issue.
A participant from the Trussell Trust’s Hunger Research described their worries:
“Carers for the night is about £60, so it is expensive, and you have to still make ends meet. Gas prices are just horrendous, and the electric prices. I have an electric wheelchair and all his other equipment that I have to run … Am I worried? Extremely!”
Motability Scheme
The Motability scheme, which enables disabled people to travel independently and lease specially adapted vehicles, will be removing the premium cars such as BMWs and Mercedes. This is set to take effect immediately, and the chancellor has stated that they will increase the production of British-built vehicles. Is this sensible economics, or does it limit disabled people in their choice when leasing a car?
In addition, the government will reform the tax breaks given to Motability and similar schemes to raise over £1 billion in five years. It does not give any details about how Motability users will be affected, so it doesn’t confirm that customers will have to pay more for their vehicles.
Andrew Miller, Chief Executive Officer at Motability Operations, stated:
“Today, the UK Government announced changes to tax exemptions for the Motability Scheme. These tax changes mean extra cost, so we now need to review how the Scheme works to help keep it as affordable as possible for our customers…”
“Over the next six months, we’ll be preparing to evolve the Scheme, looking at what we include, how we manage costs and how we make sure the Scheme stays sustainable for the long term. You’ll always get plenty of notice about any updates, and we’ll explain clearly what they mean for you.”
Employment
The government has put together an investment of £1 billion per year from 2029 -2030 to support disabled people and those with long-term health conditions into work. It is also developing the Connect to Work programme, which will receive £115 million, aiming to match 100,000 disabled people with job vacancies, starting from 2026.
Despite planning to offer schemes like this, the chancellor did not acknowledge the current issues that are preventing disabled people from gaining employment.
For instance, the publication, The Carnary, revealed the government’s intention to reduce expenditure, and the DWP is currently facing a backlog of 62,000 disabled people waiting for DWP Access. This has caused difficulties in enabling them to start or continue work, with some claims for access to work going back several years.
Like all governments before, it appears that Labour have not fully confronted the barriers that disabled people face when seeking employment. A survey by the University of Bristol in 2023 showed that three-in-ten (29%) of working-age disabled people felt that employers or potential employers had discriminated against them because of their impairment. A quarter (26%) said that employers had failed to make reasonable adjustments for them.
Businesses are under pressure regarding employment, particularly small and medium enterprises, grappling with national insurance rises and the minimum wage increase. The government has left employers in a difficult position: there is little in the coffers for disability education and training, which is vital if the intention is to address the employment gap for disabled people and enable them to feel they can apply for a wide range of jobs.
Nothing new for disabled people
This budget was best summed up by the charity Disability Rights UK:
“After 14 years of being told we are the problem, that disabled people need to be cracked down on because we need state support, this budget is just the same. Changing the colour of the tie has made little difference to the material reality for our community.”
You can read the full 2025 UK Budget on the UK government website.
How do you feel this budget will impact you? Let us know in the comments box, on social media or contact us to share your personal story.