Key Points
- Chancellor Rachel Reeves announced additional welfare cuts after the Office for Budget Responsibility revised savings projections downward.
- Up to 3.2 million families face average annual losses of £1,720, with 250,000 people at risk of poverty.
- The health element of universal credit will freeze for existing claimants until 2029-30 and halve to £50 for new claimants from 2026-27.
- Labour MPs including Kim Johnson, Richard Burgon and Debbie Abrahams criticised the measures as cruel and poverty-inducing.
- Charities warned of worsened health conditions and increased child poverty from the changes.
Liverpool (Liverpool Standard) January 31, 2026 – Families in Liverpool and across the UK are voicing deep fears over impending welfare cuts set to deepen poverty amid a cost-of-living crisis.
The cuts, detailed in Chancellor Rachel Reeves’s spring statement, target the health element of universal credit, freezing it for existing claimants until 2029-30 and reducing it to approximately £50 for new claimants starting in 2026-27. According to The Independent, these measures follow the Office for Budget Responsibility’s assessment that prior plans would save £3.4 billion rather than the hoped-for £5 billion, prompting further austerity.
What triggered these additional benefit cuts?
The government’s fiscal plans faced revision after the Office for Budget Responsibility disclosed lower-than-expected savings from initial welfare reforms. This led Reeves to introduce extra cost-saving steps on Wednesday, affecting millions reliant on support.
As reported by Joe Murphy of The Independent, the changes risk pushing 250,000 people into poverty, with 3.2 million families losing an average of £1,720 yearly.
How are Labour politicians and charities responding?
Labour MP for Liverpool Riverside Kim Johnson announced she would vote against the measures, joining critics like Richard Burgon, who called it an especially cruel choice, and Debbie Abrahams, chair of the Commons work and pensions committee. Abrahams stated the cuts would lead to increased poverty and worsened health conditions.
What specific criticisms emerged from experts?
Ruth Curtice, chief executive of the Resolution Foundation, noted that while health and disability benefit reform is needed, the scale and timing prioritise short-term savings over long-term change. Helen Undy of the Money and Mental Health Policy Institute described it as another hammer blow for those struggling with mental health and finances, while Julia Pitman of Action for Children warned of more children falling into poverty.
What lies ahead for affected families?
Reeves defended the reforms, stating the government inherited a broken welfare system where one in eight young people are not in employment, education or training. No immediate reversals have been confirmed, though some reports indicate potential concessions for current disability benefit claimants from November 2026.
Families in regions like Liverpool, already strained by rising costs, await clarity on implementation amid ongoing backlash from within Labour ranks and advocacy groups.
