IMMEDIATE RELEASE

New research warns that government’s PIP reforms will have a “catastrophic impact” on people’s finances and mental health, and will drive people out of the workplace

5 June 2025

The government’s plans to restrict eligibility for Personal Independence Payment (PIP) will result in a terrifying triple whammy of financial hardship, worsening mental health and reduced capacity to work for many people with mental health problems. 

That’s the warning of new research (which you can read here) by the Money and Mental Health Policy Institute — the charity founded and chaired by Martin Lewis (MoneySavingExpert) — which is urging the government to abandon its plans.  

PIP is a benefit which people with long term health conditions or disabilities can claim to help cover the extra costs associated with their condition. In March the government announced plans to restrict eligibility to the ‘daily living’ component of PIP, which is intended to help people whose condition makes it difficult to complete daily tasks such as preparing meals, cleaning and dressing, communicating and making budgeting decisions (1). 

To qualify for this benefit, people are assessed on how much assistance they need with each of those daily tasks. The more support someone needs, the more points they are awarded, and currently people who score 8 or more points across a range of tasks are eligible. 

But under the government’s planned reforms, people will only be eligible for the ‘daily living’ component if they score 4 or more points on a single task, like preparing food or managing a budget. This will make it much harder for people to qualify for the benefit, and it is expected to result in 800,000 people losing their PIP allowance (2). 

Money and Mental Health’s new research shows that these changes will have a devastating financial and psychological impact for many people with mental health problems. Based on an in-depth survey of 227 people with a mental health condition who currently receive PIP (3), the research shows:

• A significant number of people with mental health problems expect to lose PIP under the new reforms — and would face a terrifying income shock as a result. 24% of people surveyed say that they will not be eligible for PIP under the new reforms, with another 39% not sure if they’ll be affected. Around a third of the group who expect to lose out receive the ‘enhanced’ rate of PIP due to having high support needs, and face an annual income drop of over £5,750 if they lose this benefit. The rest of this group, who receive the ‘standard’ rate of PIP, will face a still significant income cut of over £3,850 per year. 
• Losing PIP would force many people with mental health problems to cut or stop spending on critical support they need to support their wellbeing. 82% of respondents who use PIP to pay for counselling, therapy, personal care or support needs — and who are set to lose this benefit — say they will significantly reduce or stop spending on this altogether if they lose PIP. A research participant said: “I feel incredibly distressed at the prospect of losing additional money that goes towards therapy. The amount I get is not covering all the additional costs that come with mental health difficulties as it is.”
• Losing PIP would also have a huge impact on people’s ability to keep up with day-to-day bills. 85% of survey respondents who use PIP to pay for groceries say they will need to significantly cut or stop spending on this, as do 76% who use PIP to pay for essential household bills. 
• The cumulative impact of these changes would be devastating for people’s mental health. A staggering 97% of respondents say the PIP changes would have a “significant negative impact” on their mental health. Some respondents reported that the prospect of losing PIP has resulted in them having panic attacks or feeling suicidal. 
• A significant number of people also say that these reforms would force them out of work, or to reduce their hours. Around one in five survey respondents who currently receive PIP are in employment. But 63% of that group say they would need to reduce or give up work if they lost their PIP entitlement. For some, this is due to the impact it would have on their mental health, while others said they would not be able to afford the transport costs of going to work. Another respondent said: “PIP pays for the private therapy… which keeps my mental health at a functioning level most of the time. Without these I doubt I could even manage the permitted work hours (14 hours per week) that I do.”

Read the research here.

Helen Undy, Chief Executive of the Money and Mental Health Policy Institute, said

“The message to the government from this research is clear – its proposed changes to PIP will have a catastrophic impact on people with mental health problems’ wellbeing, finances, and working lives. 

“Getting PIP can be the difference between being able to afford the treatment, support and everyday essentials you need, or facing worsening mental health and financial hardship. Some of the people we’ve spoken to say they will struggle to survive day-to-day if they lose this payment and that even the prospect of it has contributed to them having suicidal thoughts.

“The government says its welfare reforms will help more people move into work. But you don’t do that by depriving people of a critical financial lifeline that helps them stay well. Our analysis shows that these changes would actually result in many people with mental health problems who have a job cutting their hours or leaving the workplace altogether.  

“We urge the government to ditch these plans. Balancing the books should not come at the price of causing misery and hardship for some of the most vulnerable people in society.”

ENDS

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].