Sick and disabled set to lose £1,200 in welfare benefits

The shocking scale of the benefits cuts needed by Rachel Reeves to balance the books could see the disabled and long-term sick lose as much as £1,200 a year, a leading think tank has warned.

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The analysis by the respected Institute for Fiscal Studies comes as work and pensions secretary Liz Kendall will today unveil plans to slash benefits by around £5bn.

The government has already indicated that it will focus on working-age welfare claimants, particularly those claiming disability and incapacity welfare payments, with fears that the annual bill for these benefits will hit £70bn by 2030.

The concerns come as the Organisation for Economic Cooperation and Development (OECD) downgraded the UK’s already low growth forecasts in the wake of the impact of Donald Trump’s tariffs around the world.

The government insisted that its hand is not being forced into making benefits cuts to balance the books as Ms Reeves met with regulators to hear their ideas on boosting growth.

But IFS director Paul Johnson warned that Ms Reeves already had “no room for manoeuvre” in her spring statement next week, which is already being dubbed “an emergency Budget”. According to the IFS, hitting this target will mean a potential cut of 16 per cent for claimants.