IMMEDIATE RELEASE

“Another hammer blow for people struggling with their mental health and finances” — Money and Mental Health response to Spring Statement

26 March 2025

In today’s Spring Statement, the Chancellor Rachel Reeves outlined plans to cut and freeze Universal Credit incapacity benefit payments for new claimants, who have been assessed as too unwell to work due to experiencing poor mental health or other conditions. 

These payments will be cut by 50% compared to payments for existing claimants, and will be frozen at this rate until 2030. This follows the welfare reforms announced last week, which included plans to make it harder for people to qualify for Personal Independence Payments, and a freeze on incapacity benefits for existing claimants until 2030.

Responding to this announcement, Helen Undy, Chief Executive of the Money and Mental Health Policy Institute, said:

“These announcements amount to another hammer blow for people who are struggling with their mental health and finances. 

“Incapacity benefits are a lifeline for people who have been assessed as too unwell to work due to their mental or physical health. Cutting these payments by 50% and freezing them, while the cost of everyday essentials continues to rise, effectively penalises people for becoming sick, and the government’s own estimates show this reform package will push an additional 250,000 people into poverty.

“This hardship can make it harder to recover and to return to work, risking undermining rather than boosting the government’s efforts to grow the economy. It will also pile on more anxiety and fear for many people with mental health problems who are still reeling from the plans to cut PIP announced last week. With the OBR now estimating that 800,000 people will lose out to the tune of thousands of pounds a year as a result, and 96% of households affected containing someone with a disability, there’s the real potential for widespread suffering.  

“We urge the government to reverse course. Balancing the books shouldn’t come at the price of causing misery and hardship for some of the most vulnerable people in society.”

ENDS

Contact:

To set up an interview or for any other media enquiries, please contact Alex Goodfellow, External Affairs Officer, on 07935 216 804 or [email protected].

Notes to Editors

About the Money and Mental Health Policy Institute

The Money and Mental Health Policy Institute is an independent charity set up by Martin Lewis, and committed to breaking the link between financial difficulty and mental health problems. We conduct research, develop practical policy solutions and work in partnership with both those providing services and those using them to find what really works. www.moneyandmentalhealth.org