Martin Lewis warns Labour £5bn benefits cuts are ‘fraught with challenges’

Labour’s reforms will see disability benefits scaled back for millions

Money expert Martin Lewis has shared his initial analysis of Labour’s newly announced changes to the welfare system, calling them “fraught with challenges”.

The reforms were announced by work and pensions secretary on Tuesday, with the measures amounting to £5 billion in cuts to welfare. This was mostly concentrated on scaling back health and disability-related benefits as part of Labour’s ‘Pathways to Work’ Green Paper.

Writing on social media platform X in a rare intervention, Mr Lewis said: “PIP (Personal Independence Payment) is often an individual's lifeline, the difference between an unsustainable life and a manageable one. The govt says those in 'genuine need' will be protected, yet that all boils down to matter of definition.”

The changes to PIP are understood to form the bulk of the government’s £5 billion in cuts, although this won’t be clarified until Labour releases more costing details next week. Ms Kendall confirmed the eligibility for the the benefit – which is designed to help with costs incurred by health issues – will be effectively tightened, resulting in fewer claimants being found eligible.

The Money Saving Expert founder has in the past expressed a reluctance to weigh in on politics, instead preferring to focus on financial advice.

Martin Lewis appeared before the Treasury Committee to give evidence on Lifetime Isas in February (PA Wire)

He added: “Plus those whose mental health isn't good can struggle with administration, process and decision making and be panicked by assessment and review. While reducing assessments will help to that, how that new assessment is designed and structured is very important so it doesn't tip people further into the abyss.”

However, the money expert also welcomed the announcement of a new ‘right to try’ scheme, calling it a “long-needed positive.” This policy will see disabled benefit claimants able to retain their entitlement should they undertake employment that does not become long-term.

Mr Lewis’s ventures into politics have become more frequent in the first few months of 2025, as the financial guru appeared at a Treasury Committee about Lifetime ISAs just a few weeks ago to give his views on how they should change. On Wednesday, he will speak to the energy department about the practice of back-billing for energy costs.

The government said the measures are designed to help more sick and disabled people into work. Ms Kendall said: “There’s clear evidence that shows good work is good for health and plays a vital role in recovery. Too many disabled people and people with health conditions want to work but are denied the right support to do so.”

But many campaigners and charities have taken issue with the announcement. Early estimates have found that an estimated million people will lose their disability benefits, mostly targeted at those claiming PIP.

The Disability Benefits Consortium, a coalition of over 100 charities, called the changes “immoral and devastating” and called on the government to “abandon these cruel cuts”.