Autumn Statement ushers in new era of welfare reform

A bold new vision for welfare backed by nearly £30 billion has been set out by Work and Pensions Secretary Mel Stride

  • Millions of people will benefit from next generation of welfare reforms and extra support for those most in need, announced at Autumn Statement
  • Benefits increased by 6.7% and pensions by 8.5%, maintaining commitment to seeing the country through cost of living pressures
  • DWP Secretary Mel Stride heralds new era offering a “brighter future for millions”

The plans offer unprecedented employment and health support to help over a million people, while protecting those in most need from cost of living pressures – including raising pensions and benefits and increasing help with housing costs.  

Long term decisions to provide unprecedented help for people to move off welfare and into work were at the heart of the Government’s plan for growth set out at the Autumn Statement.  

While unemployment has been almost halved since 2010, the £2.5bn Back to Work plan will help thousands of people with disabilities, long-term health conditions and the long-term unemployed, to move into jobs. This comes alongside new guarantees for those on the highest tier of health benefits around keeping benefit support to cushion those who try work.  

The transformative employment programme comes as the Government continues to protect the most vulnerable, delivering a Triple Lock-protected boost for pensioners and raising benefits in line with inflation next year, worth £20bn taken together.  

The changes mean the full rate of the new State Pension will go up by £17.35 per week, while families on Universal Credit will be on average £470 better off next year. 

Around 1.6 million households will also benefit from an increase to the Local Housing Allowance – and will be around £800 a year better off on average. Worth more than £7bn over five years, this commitment will support low-income families in the private rented sector with rent costs and help prevent homelessness.  

Secretary of State for Work and Pensions, Mel Stride MP said: 

"Work changes lives. With the next generation of welfare reforms, we will help thousands of people to realise their aspirations and move off benefits into work, while continuing to support the most in need. 

"We are taking long term decisions that will build a brighter future for millions, offering unprecedented support to open up opportunity and grow the economy, building on our record that has seen almost four million more people in work since 2010. 

"Our reforms will remove the barriers to work that we know some people still face, while we’re boosting benefits and pensions to help with cost of living pressures."

Welfare reforms announced at the Autumn Statement include:  

  • Uprating working age benefits in line with September’s CPI index figure of 6.7%.
  • Uprating state pensions in line with September’s earnings figure of 8.5%.
  • Increasing the Local Housing Allowance to cover the 30TH percentile – worth an average of £830 per year.
  • Expanded jobcentre support including intensive help for those on Universal Credit
  • Introducing the Chance to Work Guarantee, which will tear down barriers to work for millions of claimants to try work with no fear of reassessment or losing their health benefit top-ups.
  • Increasing mental health support for jobseekers by expanding NHS Talking Therapies treatment and the Individual Placement and Support programme, supporting almost 500,000 over five years.
  • Matching 100,000 people per year with existing vacancies and supporting them in that role through Universal Support.
  • Rolling out WorkWell to support people at risk of falling into long-term unemployment due to sickness or disability.
  • Reforming the Work Capability Assessment for new health benefit claimants to better reflect the opportunities available in the modern world of work.
  • Stricter sanctions for people who should be looking for work but aren’t engaging with jobcentre support.
  • Building on the Mansion House reforms with further steps to improve private pension returns and grow the economy.
  • Introducing new Government powers to request data from organisations such as banks when accounts are showing signals of fraud and error.

The Government’s radical new plan will stem the flow people falling out of work and onto inactivity benefits due to physical or mental health problems, as it takes the long-term decisions to help people realise their dreams to find a job and build a better life. 

With this unprecedented level of employment support comes tougher enforcement of sanctions for fit and able people who should be looking for work but aren’t. 

Work coaches will use tools to track people’s attendance at jobs fairs and interviews, and close benefit claims of those able to work who have been sanctioned and no longer receiving money after six months.  

Taken together, the package will make sure those who are vulnerable or on the lowest incomes are protected, with intensive support to get them back into work, while ensuring fairness to the taxpayer.  

Further Information

The Autumn Statement announced a boost of nearly £30 billion to help people into work alongside increases to the state pension and wider benefits. This includes: 

  • Boosting the State Pension and Pension Credit by £12 billion and increasing wider benefits - including Universal Credit and disability payments - by £8 billion, from April 2024 for financial year 2024/25.
  • More than £7 billion over five years to help cover rents for low-income households through increasing Local Housing Rates from next April.
  • The Back to Work Plan announced £2.5 billion of investment to 2028/29 to help people with long-term health conditions and disabilities to look for and stay in work. This includes:
  • £1.3bn to support long term unemployed people back into work through extending restart and further post restart intervention
  • For those with long term health conditions and disabilities: 
  • £700m to expand universal support and test reforms to the fit note 
  • £500m for DHSC funding for talking therapies and expand individual placement and support. 
  • This build on measures announced at Spring Budget this year with £3.5 billion investment over five years to boost workforce participation and grow the economy. This includes:
  • £2 billion investment in support for disabled people and people with long-term health conditions.
  • £900 million investment in support for parents on Universal Credit.
  • £70 million investment in support for over-50s.

Department for Work and Pensions