As with all Budget statements, much of what is announced by the Chancellor of the Exchequer has a direct effect on the general public and families around the nation watch and listen and try to digest how the announcements will affect them financially.

In the recent Spring Budget Statement, Chancellor Rachel Reeves, made various announcements that will affect many people who use this website to look for part time work.

Lots of people who work part time do so because they might be in receipt of benefits and cuts and changes were announced on these benefits that will directly impact many families and individuals.

The Chancellor announced deep cuts to both the welfare system and to public services as she said that since the last Budget Statement, the global economy has become more uncertain. And as a result, this has pushed up borrowing costs.

Before the Budget Statement was even made, much had been said in the press about the upcoming cuts to welfare with many Labour MPs said to be very concerned by them.

Rachel Reeves said Labour was elected to “bring change to our country, provide security for working people and deliver a decade of national renewal.”

This Budget Statement was announcing measures that would help to bring about those aims.

If you have been following the news around the Budget Statement, you might know that the scale of the welfare cuts had risked a Labour rebellion but for now, at least, it looks like this was seen off. Many Labour MPs are unhappy with the scale of the benefit cuts.

Welfare Cuts

The welfare cuts were the area that were dominating Budget Statement headlines before Chancellor Rachel Reeves delivered her speech. And this is the area where many of you are going to be most directly affected so let’s start there with the main points.

The Chancellor announced huge cuts to the welfare budget which the OBR (Office for Budget Responsibility) says amount to £4.8 billion worth of savings for the Treasury whilst also getting more people into work.

We will look more closely at the initiatives the Government intends to introduce that will get people back into the workplace rather than relying on benefits further into this article.

As a result of the announced welfare cuts, it is said that more than 3 million families (an estimated 3.2 million) will lose an average of £1,720 per year once inflation is taken into account according to government analysis.

And an extra 250,000 will fall into relative poverty by 2029-30. This is a total of 14.5 million people including an extra 50,000 children.

Whilst this certainly does not make for happy reading, the government has said that, overall, whilst it expects 3.2 million families to be worse off as a result of the welfare reforms, around 3.8 million families will actually be better off by the end of the decade. 

Pips and Universal Credit are the two areas where cuts and changes will be made.

What Are The Changes To Pips?

So if you are someone who is currently in receipt of Pips, let’s take a look at what could be happening to your payments. 

Pips are Personal Independent Payments and the Chancellor announced that, currently, more than 1,000 people a day are qualifying for Pips.

They are the main disability benefit and are a monthly, tax free payment that is made to 3.6 million people who have long term physical and or mental health conditions in England, Wales and Northern Ireland. Scotland has its own, similar, system.

Pips payments are not means tested and, therefore, do not reduce or increase regardless of any personal savings or income you have. This means you can be working full time or part time and also be receiving Pips at the same time. 

There are two elements to the payments – a daily living component and a mobility component. You might be eligible for – and in receipt of – one or both of the components, depending on your situation.

Chancellor, Rachel Reeves, said that the Labour Party is the party of work and for many in receipt of Pips, it is a waste of their potential and their future. 

Therefore, Pips are going to be reviewed. In the future, the government is planning more frequent assessments for people receiving Pips but with a system whereby those with the highest level of disability or with a permanent condition will no longer have to go through the reassessment process. Peace of mind for those people who need that support and protection.

In the meantime, however, the Chancellor announced that the government will introduce an additional eligibility requirement for the Daily Living element of the benefit. And there will also eventually be stricter eligibility tests for Pips from November 2026.

Note that if you are receiving Pips for the Mobility element, these payments will not be affected.

What This Means For Your Pocket

So what will happen if you are a person who is claiming Pips? 

When the criteria are changed and tightened for being entitled to receive Pips, if you are already claiming them and then find that you don’t qualify when the changes come into force, then the bad news is that you are going to be the hardest hit. 

There are around 370,000 people who are expected to lose their Pips entitlements altogether. 

For others – an estimated 430,000 of you – once the changes come into force, you will receive less than you were previously entitled to. In all, this is calculated at an average loss of £4,500 per year.

What Are The Changes To Universal Credit?

Chancellor, Rachel Reeves also announced changes to Universal Credit.

Universal Credit is currently paid to 7.5 million people and of those 7.5 million, more than 3 million people are not required to find work. This is a number that has increased sharply in recent years.

The good news is that if you are claiming Universal Credit, you could benefit. 

Because of rises to the Universal Credit payments, 3.8 million current and future claimants will be £420 a year better off taking inflation into account. This comes as a result of Universal Credit increases and changes to the assessment process.

The rate of increase has been revised, however. The Chancellor announced that the basic rate of Universal Credit will rise by £14 a week by 2029-30. Originally, it had been stated that the rise would be £15 per week so if you are in receipt of Universal Credit, you won’t be getting quite as much as you might have expected. 

If you are a single claimant and you are over the age of 25, you will be one of 6.5 million people who will get £106 per week rather than £107 per week. This is an increase in the current Universal Credit Standard Allowance from £92 per week or £393.45 per month.

Currently, this Standard Allowance amount can more than double with an extra top up worth £416.19 if you have a disability or long term condition. This is where some of the changes may affect your finances negatively. 

If your ability to work is limited, you might also be receiving the Health element of Universal Credit. As an existing claimant, the amount of money you are receiving for this Health element will be frozen until 2029-30. 

This will affect 2.25 million people who are currently receiving Universal Credit and it works out as an average loss of £500. But it is important to remember that some of this loss will be offset by the increase in the Universal Credit payments.

For new claimants, in 2026-27 the amount ıf money you receive for the Health element of Universal Credit will be halved; reduced to £50 per week. And this will be frozen.

As for those of you who are under the age of 22, you will no longer be able to claim the Health-related element of Universal Credit. 

Back To Work

Whilst there have been deep welfare cuts, Chancellor, Rachel Reeves, said that this was about getting those people who can work back into the workplace so that they can fulfil their potential.

As part of this, £1 billion has been allocated for employment support to help people back into work. These are the people with disabilities and long term health problems who could benefit from having a career. This support to get back into work will help mitigate the financial losses many on benefits will experience. 

It was pledged that the support to get back into work will be high quality, tailored and personalised support to help people find the most suitable jobs for their needs.

An additional £400 million was also allocated to support job centres in ensuring these changes are delivered effectively.

The Chancellor said that the government wants to help those who can work back into employment whilst also doing more to protect those with severe conditions who are unable to work.

This will be done by now requiring claimants to go through the Pips assessment system to ascertain the needs of people. A right-to-try system will also be brought in where people can try out a job and not be financially penalised if the job doesn’t work out.

Civil Service Cuts

If you work as part of the Civil Service then the announcements in the Spring Budget Statement could directly affect you. The Chancellor announced cuts to the Civil Service in a bid to save money – this will unfortunately mean job losses.

Human Resources and other administrative roles such as Policy Advice, Office Management and Communications are the roles that will be earmarked for cuts and the Chancellor stated that £2 billion per year will be saved by the end of this decade. 

It is feared that 10,000 jobs could be at risk with some critics predicting that figure could get closer to 50,000.

Affordable Homes Boost

Good news for those of you looking for a new home – one that you can afford! A £2 billion grant was announced to build thousands of new social and affordable homes. Chancellor, Rachel Reeves, said that this is the biggest boost to this type of housing in a generation with 305,000 homes per year to be built. 

The Labour Party had pledged 1.5 million new homes but this target will be missed. They now say that 1.3 million homes will be built by the next election. 

Construction Worker Recruitment

And because of this huge investment in the construction of affordable homes and social housing, that has meant there will also be a big recruitment process for construction workers.

If you are thinking about going into the construction industry, now could be the perfect time to do that because there is currently a shortage of skilled workers within the industry. There are currently 35,000 job vacancies in construction.

This shortage of workers can put the government’s house building scheme under threat so the Chancellor has £625 million to train 60,000 bricklayers, engineers, carpenters and electricians over the next 4 years. 

Living Standards & Household Bills

There is no denying that the high cost of living is not going away and this Spring Statement,with its announcements of deep welfare cuts, comes at a time when you will also see a rise in household bills. 

Water, energy and council tax bills are all set to rise from April 1st. But, if you cast your minds back to the Autumn Budget Statement in 2024, some of you will be benefiting from some aspects of that previous Budget Statement which will also come into play in April, too. 

If you are over 21 years of age and you are earning the minimum wage, you will be getting a pay rise from £11.44 per hour to £12.21 per hour. 

This can still push many people to their financial limit, however, as prices could rise faster than previously thought with inflation expected to average 3.2 per cent.

But the good news is that, overall, living standards are expected to improve.

It is forecast that disposable income is set to rise by 2 per cent between now and 2030. Whilst this could change, it is a little silver lining around what might feel like a large financial cloud for many.