Liz Kendall Pledges to Fix ‘Broken’ UK Benefits System: What It Means for Your Finances

Liz Kendall Pledges to Fix 'Broken' UK Benefits System: What It Means for Your Finances - Zomi Wealth
In a significant policy announcement, the UK’s Secretary of State for Work and Pensions, Liz Kendall, has committed to overhauling what she calls the country’s “broken” benefits system. Her pledge comes amid growing economic pressures, rising welfare costs, and concerns about how to better support individuals into work.
According to the BBC, Kendall’s proposed reforms are wide-reaching — particularly targeting youth unemployment and revisiting long-standing disability benefit provisions.

Key Reform Highlights

• Youth Guarantee
Kendall has announced a “youth guarantee” aimed at young adults aged 18 to 21. Under this initiative, young people would be required to either work, study, or train — or risk reductions to their benefits.
“No young person should be left behind,” Kendall said, noting that long-term unemployment at an early age often leads to reduced earning power over a lifetime.
This echoes Labour’s broader ambition to increase economic participation and reduce dependency on the welfare system.
• Disability Benefit Reforms
Another central element is a reassessment of Personal Independence Payments (PIP) and other incapacity-related benefits. The government is exploring whether some claimants, especially those with mental health challenges or “milder” physical conditions, should continue receiving financial support.
According to The Guardian, early estimates suggest up to 1.2 million people could lose between £4,200 and £6,300 annually under these proposed changes.

What This Means for Financial Planning

These changes could have a profound impact on individual financial health, especially for vulnerable clients. Shifts in the welfare system can directly affect budgeting, access to credit, and long-term financial goals.
Key points to consider:

• Reassess eligibility: Keep track of changes to benefit criteria, especially for PIP or Universal Credit.
• Plan for income variability: Reduced benefits may require a revised budgeting strategy.
• Consider employment support services: Explore training or upskilling options aligned with the new employment requirements.

FCA Compliance & Consumer Duty

Financial services firms regulated by the Financial Conduct Authority (FCA) must uphold Consumer Duty — acting in good faith, avoiding foreseeable harm, and supporting clients in making informed decisions.
In light of these benefit reforms, it is vital to:

• Offer personalised guidance to clients affected by PIP or Universal Credit changes.
• Provide accessible, inclusive financial advice to vulnerable clients — in line with FCA principles.
• Collaborate with third-party employment or retraining providers where appropriate.

Final Thoughts

While Liz Kendall’s vision aims to create a more sustainable and employment-focused welfare system, the short-term impacts could be challenging — especially for those reliant on disability support.
Understanding these developments is key to maintaining financial stability and planning effectively in a changing benefits landscape.

Sources:

https://www.bbc.com/news/articles/c89y30nel59o
https://www.theguardian.com/
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