22nd September 2026
Personal Independence Payment has become one of the fastest-growing areas of the UK welfare system. Now the Institute for Fiscal Studies is asking a more fundamental question than simply whether spending should go up or down.
What is PIP actually supposed to achieve, and is the present system the best way of doing it?
PIP is paid to working-age disabled people to help meet the additional costs associated with disability. Unlike Universal Credit, it is not means-tested. A person can receive it whether they are working or not, and eligibility is based on difficulties carrying out everyday activities rather than their ability to work.
The numbers have changed dramatically.
In England and Wales, the proportion of 16- to 64-year-olds receiving PIP or an equivalent disability benefit rose from 5.5% in August 2019 to 8.2% in August 2025.
Spending on working-age disability benefits has risen from £14 billion in 2019–20 to £25 billion in 2025–26 in today's prices. Official forecasts suggest it could reach £34 billion by 2030–31.
That growth is particularly striking because PIP is only one part of the wider benefits bill.
The IFS says claims have increased across all age groups and health conditions, but the fastest proportional increases have been among younger adults and people claiming because of mental health, learning and neurodevelopmental conditions.
This presents the Government with a difficult problem.
Simply reducing everyone's PIP payment would save money, but it would also reduce support for people who may have significant additional costs because of their disability.
The IFS instead examines seven possible structural changes.
One would be to keep the present functional assessment but change the thresholds or distribution of awards.
Another would make a medical diagnosis a more important part of eligibility. This could make some decisions more objective, but would create its own problems because diagnoses are not always straightforward and requiring them could put additional pressure on the NHS.
Another proposal would treat mental and physical conditions differently. The IFS notes that 45% of existing PIP claimants have a mental health, learning or neurodevelopmental condition recorded as their main disabling condition, although many also have physical conditions.
There are also more radical possibilities.
PIP could partly be replaced by vouchers for approved disability-related goods, or by directly providing services such as therapy or care.
And there is the politically sensitive option of means-testing PIP, so that people with higher incomes or substantial savings would receive less or nothing.
But the IFS points out that each option has a downside.
A means test would reduce spending and concentrate assistance on people with lower incomes, but it would fundamentally change the principle behind PIP. A voucher system could ensure money was spent on disability-related needs, but would give recipients less freedom over how to use the support.
Perhaps the most important warning from the report concerns the assessment process itself.
The IFS finds evidence of subjectivity, inconsistent treatment of similar applicants and considerable stress for some people going through assessments. Around 18% of planned reassessments result in someone losing PIP, while another 25% result in the amount changing.
So changing the rules does not automatically produce a better system. A new assessment system could simply create different problems.
Scotland has its own system
There is an important Scottish qualification to all this.
PIP was devolved to Scotland and has been replaced by Adult Disability Payment, which has a different assessment system. The IFS report is therefore not proposing changes directly to Scotland's benefit system.
However, the financial connection with Westminster remains important. Changes to disability-benefit spending in England and Wales can affect the funding available to the Scottish Government. Scotland then decides what to do with its budget.
That makes the PIP debate relevant north of the border even though the rules are different.
The IFS concludes that there are no easy reforms. The Government has to decide whether the main purpose is to compensate people for the additional financial costs of disability, reduce inequalities in living standards, or improve people's wellbeing.
Those objectives can point towards quite different systems.
The forthcoming Timms Review is expected to make recommendations this autumn, and the Government could choose to act at the Budget.
The big question is therefore not simply whether the £25 billion PIP bill is too high.
It is whether taxpayers are getting the right system for that £25 billion, and whether any attempt to control the rising cost can be achieved without making life harder for people who genuinely need the support.
Options for reforming personal independence payment