Up to 1.2m people could lose between £4,200 and £6,300 per year from changes to Pip, Resolution Foundation says – as it happened

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The Resolution Foundation has also put out a statement about the benefit cuts. It says the changes to the rules for Pip (the personal independent payment) could cost up to 1.2 million people between £4,200 and £6,300. It says:

The main savings are to be achieved through restricting entitlement to Pip - a benefit that is paid regardless of whether someone is in work, to compensate for the additional costs of being disabled.

The foundation says that if the government plans to save £5 billion from restricting Pip by making it harder to qualify for the ‘daily living’ component, this would mean between 800,000 and 1.2 million people losing support of between £4,200 and £6,300 per year by 2029-30.

With seven-in-ten Pip claimants living in families in the poorest half of the income distribution, these losses will be heavily concentrated among lower-income households. This looks like a short-term ‘scored’ savings exercise, rather than a long-term reform, says the foundation, given that ministers have also said they will look again at how Pip is assessed in the future.

The foundation also says up to four million families will benefit from general universal credit becoming a bit more generous- but only by around £3 per week.

Louise Murphy, a senior economist at the foundation, said:

Around one million people are potentially at risk of losing support from tighter restrictions on PIP, while young people and those who fall ill in the future will lose support from a huge scaling back of incapacity benefits.

The irony of this health and disability green paper is that the main beneficiaries are those without health problems or a disability. And while it includes some sensible reforms, too many of the proposals have been driven by the need for short-term savings to meet fiscal rules, rather than long-term reform. The result risks being a major income shock for millions of low-income households.

Cover photo:  Liz Kendall unveils Labour's 'action to fix the broken benefits system'