Reform UK has unveiled plans for a sweeping overhaul of Britain's welfare system that it says would save more than £50 billion a year, including abolishing Personal Independence Payment for working-age adults, ending the health element of Universal Credit and transferring greater responsibility for long-term sickness to employers.

Robert Jenrick, Reform's Treasury spokesman, described the package as the biggest welfare shake-up in a generation and argued that the existing system has become both economically unsustainable and ineffective at helping people return to employment.

The proposals are due to be set out in greater detail in a 50-page policy paper, Making Welfare Work, on Monday.

The £50 billion figure is Reform's own projected annual saving and has not yet been independently validated.

Labour has dismissed it as 'fantasy economics', arguing that the proposals would remove support from disabled people while transferring substantial costs to employers.

The Conservatives, meanwhile, are promoting their own welfare reductions and accusing Reform of inconsistency on benefits policy.

At the center of Reform's plan is a fundamental redesign of disability support.

The party says it would abolish Personal Independence Payment, commonly known as PIP, for working-age adults and replace it with a new Health Security Allowance.

Cash payments would be reserved for people judged to have severe and enduring disabilities.

Other disabled people who currently receive cash support could instead receive help through council-administered disability support accounts.

These would pay for specific additional costs associated with disability, including equipment, home adaptations, transport and personal assistance, with support tailored to individual and local requirements.

Reform says the disability changes alone would save approximately £22 billion.

Across the wider package, the party estimates that about 2.89 million people would have benefits reduced or removed.

Those numbers remain projections based on Reform's proposed eligibility rules rather than outcomes demonstrated through implementation.

The party also proposes abolishing the health element of Universal Credit for working-age adults.

The current system provides additional Universal Credit support to people whose health conditions or disabilities limit their ability to work.

Reform argues that the structure can weaken incentives to return to employment and says the replacement system should concentrate cash assistance on people with the most serious disabilities while directing others toward employment and practical support.

Assessment would also change substantially.

Jenrick proposes replacing what he describes as a web of existing tests with a single face-to-face assessment conducted by clinicians.

The approach would move away from multiple administrative processes and make medical assessment more central to decisions about eligibility.

A second major element would shift part of the financial responsibility for long-term sickness from the state to employers.

Businesses with more than five employees would be required to purchase a new form of insurance called Return to Work Cover.

The insurance would cover costs during the first two years after an employee became unable to work through sickness, beyond the period covered by statutory sick pay.

Reform argues that this would keep workers connected to their employers and give businesses a direct financial incentive to provide rehabilitation, workplace adjustments and other assistance capable of helping employees return to work.

Companies that successfully helped employees return sooner could eventually benefit from lower insurance premiums.

To offset the additional cost imposed on businesses, Reform proposes initially reducing employers' National Insurance contributions by 0.2 percentage points, which it says would make the system cost-neutral overall for employers.

Whether that would be cost-neutral for individual companies would depend on insurance pricing, workforce health and the eventual design of the scheme.

Reform says the proposal draws on the Netherlands, where employers carry considerably greater responsibility for workers during long periods of sickness.

Jenrick says the Dutch approach contributed to a 40 percent reduction in disability-benefit applications.

Translating that experience directly to Britain would depend on differences between the two countries' labour markets, insurance systems and welfare structures.

Children's disability benefits would also come under review.

Reform proposes changing future claims involving conditions including anxiety, depression and attention deficit hyperactivity disorder so that the rules align more closely with its proposed adult system.

The changes described so far would apply to future claims and a subset of mental-health conditions rather than automatically removing existing children's awards.

The announcement comes amid a broader political battle over Britain's rising health and disability benefit costs.

Parliamentary analysis has found that health-related welfare expenditure increased from 1.1 percent of gross domestic product in 2007-08 to 1.8 percent in 2024-25 and was forecast to reach 2.1 percent by 2028-29. At the same time, non-health-related, non-pensioner welfare spending has fallen substantially as a share of the economy, making health-related benefits the central pressure point in the current welfare debate.

Reform's proposals go substantially further than the changes currently being pursued by Labour or proposed by the Conservatives.

Jenrick argues that previous governments have repeatedly adjusted eligibility rules without addressing what Reform regards as the fundamental structure of the system.

The Conservatives are pursuing a competing position.

Party leader Kemi Badenoch has proposed ending eligibility for what she describes as lower-level mental-health conditions such as anxiety, restoring face-to-face disability assessments, reassessing existing claimants under new criteria, restricting welfare access for many non-UK citizens and reinstating the two-child benefit cap.

Reform itself has changed position on that final issue.

Nigel Farage previously supported removing the two-child cap, but the party subsequently reversed course and now says it would reinstate the limit if it entered government.

Labour says it is already reforming welfare through changes to Universal Credit, increased face-to-face assessments and £3.5 billion of employment support.

It argues that Reform's projected savings have not been credibly demonstrated and that shifting sickness costs onto employers could create new financial pressures for businesses.

The policy therefore sets up a significant argument not simply about how much Britain spends on welfare, but about who should carry the financial risk when someone becomes disabled or too sick to work.

Reform's answer would substantially reduce the role of unrestricted cash disability payments for working-age adults, expand targeted provision of disability-related services and require employers to shoulder more responsibility for long-term sickness.

The decisive test will come with publication of Making Welfare Work, when Reform will need to show how its proposed eligibility thresholds, employer insurance system and disability accounts produce the claimed savings of more than £50 billion without creating equivalent costs elsewhere.

Until those calculations can be examined in detail, the scale of the proposed restructuring is clear, while the size of the claimed saving remains a party projection rather than an independently established fiscal outcome.