PIP Reform: The IFS Examines What Could Change

18th September 2026

The future of disability benefits is becoming one of the more difficult issues facing the UK government, with spending rising rapidly and increasing numbers of people receiving support.

A new report from the Institute for Fiscal Studies (IFS) examines what could be changed in Personal Independence Payment (PIP), the main working-age disability benefit in England and Wales.

The figures explain why the issue has become politically important. The proportion of 16- to 64-year-olds receiving disability benefits rose from 5.5% in August 2019 to 8.2% in August 2025. Spending on working-age disability benefits has increased from £14 billion in 2019-20 to £25 billion in 2025-26 and is officially forecast to reach £34 billion by 2030-31.

But the IFS also points out that people receiving PIP are considerably more likely to struggle financially. Some 51% of PIP claimants are classified as being in material deprivation, compared with 33% of disabled people who do not receive PIP and 15% of people without disabilities.

That raises an important question. Is PIP simply becoming too expensive, or is the growth partly reflecting genuine increases in the number of people with significant additional costs arising from disability?

How could PIP change?

The IFS examines several possibilities.

One would be to link the amount paid more closely to the severity of someone's disability. Under the present system, people with quite different assessment scores can receive the same amount.

Another option would be to require claimants to have a medical diagnosis. The IFS says this would probably have only a modest effect because 85% of existing PIP claimants already report having a diagnosis. Restricting eligibility to particular diagnoses could produce larger savings, but would also mean more disabled people losing access to support.

The report also considers treating physical and mental health conditions differently. Around 45% of existing PIP claimants have a mental health, learning or neurodevelopmental condition recorded as their main disabling condition. However, many of these people also have physical health conditions, making a simple division between physical and mental disability difficult.

Another possibility would be reducing support for younger claimants. The IFS notes that around 689,000 people under 30 currently receive PIP, costing about £5.5 billion a year. But younger claimants are also disproportionately likely to have severe disabilities, making such a reform particularly sensitive.

Finally, PIP could be means-tested. Unlike Universal Credit, PIP is currently available regardless of income or wealth. The IFS estimates that means-testing could theoretically save around £8.2 billion a year before taking account of changes in claimant behaviour.

The Scottish difference

There is an important Scottish qualification.

PIP was devolved to Scotland and replaced by Adult Disability Payment (ADP), which has a different assessment system. Consequently, reforms to PIP in England and Wales would not directly change the benefits received by people in Scotland. However, if Westminster reduces spending on disability benefits, this could affect the amount of funding available to the Scottish Government.

The IFS also highlights problems with the current assessment process, including evidence of inconsistent decisions between different assessment providers.

The debate, therefore, is about considerably more than simply finding savings. It involves deciding what disability benefits are actually intended to achieve, who should qualify and whether financial support should reflect the severity of a disability, household income, medical diagnosis or the additional costs faced by disabled people.

With the government's Timms Review due to make recommendations this autumn, PIP and its Scottish equivalent are likely to remain firmly in the spotlight.

Source: Institute for Fiscal Studies, "Options for reforming personal independence payment", published 17 September 2026. https://ifs.org.uk/publications/options-reforming-personal-independence-payment