Our response to the March 2025 Spring Statement
The Chancellor, Rachel Reeves, made a series of announcements on welfare reform that will affect people who have a mental illness as part of her on Wednesday, 26 March.
The Office for Budget Responsibility (OBR) said the measures will amount to ?4.8 billion of cuts to the welfare budget by 2029-30. It estimates that more than three million households will be worse off as a result of the changes. These measures will most likely also affect households in Wales, Scotland and Northern Ireland.
While the basic rate of universal credit will increase, the health element is being frozen for existing claimants until 2029-30. It is also being reduced for new claimants in 2026-27 before also being frozen.
A new, additional eligibility requirement is being added to Personal Independent Payments (PIP) while the UK Government undertakes a fundamental review of the PIP assessment.
The Chancellor announced ?1 billion is being dedicated to employment support measures to help people back into work.
The RCPsych is concerned that these plans will have far-reaching and most likely negative repercussions for people who have a mental illness. We have made it clear that the welfare system must focus on supporting people to join and remain in the job market without penalising those who, despite their best efforts, may never be able to work.
People who have a mental illness are also not currently included in NHS plans to reduce waiting lists, meaning their illness often worsens while they wait for care and treatment. This increases the likelihood of them becoming disabled and it’s therefore crucial that plans to reform the welfare system also recognise the need for fully resourced mental health services.