Steve Loftus: PIP is a fiscal crisis in the making

Steve Loftus is a businessman and utility industry analyst.

When the Personal Independence Payment (PIP) replaced the Disability Living Allowance (DLA) in 2013, it promised a more targeted, efficient approach to disability benefits. The Conservative government’s vision was clear: create a modern support system that would better address individual needs while ensuring fiscal responsibility. The points-based assessment was meant to tailor assistance more precisely while reducing overall spending.

A decade later, this well-intentioned reform has veered dramatically off course. Far from achieving the promised financial efficiencies, PIP has become an escalating burden on the British taxpayer, with costs spiralling out of control at an alarming rate.

The stark reality is captured in the figures: PIP expenditures are projected to nearly double from £18bn currently to a staggering £34bn by 2030, representing a 90 per cent increase, adding £16bn to the bill in just five years. It is a complete reversal of the programme’s fiscal aims.

A system designed to reduce disability benefit costs by 20 per cent instead increased them by 20 per cent by 2019, costing £1.5-2bn more annually than the DLA system it replaced.

This was before the floodgates opened to mental health claims.

The primary driver behind this fiscal derailment has been the dramatic surge in awards for mental health conditions. Since 2019, monthly PIP awards for anxiety, depression, and similar conditions have skyrocketed, fundamentally altering the programme’s focus and financial trajectory.

Critics rightfully question whether the assessment process has become too permissive, granting benefits that stretch far beyond PIP’s original purpose of supporting those with severe physical disabilities and long-term health challenges.

As social media amplifies awareness of qualification criteria, potentially encouraging applications that test the boundaries of eligibility, the concern about overdiagnosis cannot be ignored.

Perhaps nowhere is this problem more evident than in the Motability scheme, which provides vehicles to those qualifying for PIP’s higher rate mobility component. The numbers tell a troubling story:

• Motability users have tripled in just five years
• Approximately 815,000 individuals now use the scheme as of March 2025
• New annual leases have trebled since 2019
• Annual costs have surged to around £3.2bn

The autism claimant figures are particularly revealing, too: 113,000 individuals with autism now receive the enhanced mobility rate, with 71,000 utilising Motability services. This dramatic expansion suggests that qualification criteria have drifted far from their intended targets.

The tripling of Motability users in such a short timeframe strongly indicates that the system approves high-rate awards far more liberally than originally intended. What was designed as selective support for those with the most severe mobility challenges has expanded well beyond sustainable limits.

This isn’t to diminish the importance of independence for disabled individuals. The Motability scheme provides valuable assistance to many who genuinely need it. However, when it expands at this rate, serious questions must be asked about whether assessment criteria accurately identifies those with legitimate needs versus those who might manage with less intensive support.

As we confront these challenges, any reform must balance fiscal responsibility with compassionate support for those truly in need. PIP requires recalibration; a return to its original purpose of providing targeted assistance to those facing the most significant disabilities.

The current trajectory is simply unsustainable. Without meaningful reform, PIP will continue to consume an ever-larger share of public resources, potentially threatening other vital services. Responsible governance demands addressing these issues with both clarity and compassion.

The lessons of PIP remind us that well-intentioned policies can have unintended consequences. The time has come to course-correct this important programme before its fiscal impact becomes truly unmanageable.