Up to 100,000 more pensioners will be living in poverty after the Labour Party axed the winter fuel allowance for millions of pensioners, the government has admitted. The Department of Work and Pensions analysis show the change in rules means an estimated 50,000 more pensioners are going to be in relative poverty after housing costs next year, and 100,000 more in 2026.
This comes after the Autumn Budget confirmed plans to only pay the winter fuel payment, worth up to £300, to those claiming specific means-tested benefits, including pension credit, from this winter. It is hoped the move will save the public purse £1.5 billion a year.
The move has sparked outcry from pensioner campaigners including Age UK which urged the government to abandon the move ahead of the decision and which has vowed to continue to fight to see it reinstated. It says on its website: “We strongly oppose the means-testing of the Winter Fuel Payment because it means as many as 2 million pensioners who badly need the money to stay warm this winter will not receive it and will be in serious trouble as a result.”
On Tuesday new Government analysis of the impact of its decision to restrict the payment was published by the House of Commons Work and Pensions Committee A letter to the committee from Work and Pensions Secretary, Liz Kendall, said: “The latest modelling shows that compared to the numbers that would have been in poverty without this policy, it is estimated that in each year in question there will be an additional 50,000 pensioners in relative poverty after housing costs in 2024-25, 2025-26 and 2027-28, instead.
“The modelling also shows that an additional 100,000 pensioners are estimated to be in relative poverty after housing costs in 2026-27, 2028-29 and 2029-30. For all other measures of poverty it is estimated that there will be an additional 50,000 pensioners in poverty each year from 2024-25 to 2029-30.”
Ministers have faced criticism for slashing access to the payment, with opposition MPs urging them to rethink the move. Shadow work and pensions secretary Helen Whately said: “Finally the dam breaks and we get to see what Labour have known all along. Their winter fuel payment cuts are going to plunge 100,000 pensioners into poverty in the next few years.
“Clearly Keir Starmer feels like that’s a price worth paying to make a political point. But I don’t think those pensioners would agree with him.”
However Ms Kendall said the Labour Government had been “forced” to limit the payment due to the “£22 billion black hole” it blamed the Conservatives for leaving behind. In her letter, she wrote: “Means-testing winter fuel payments was not a decision this government wanted or expected to take. However, we were forced to take difficult decisions to balance the books in light of the £22 billion black hole we inherited.
“Given the dire state of the public finances, it’s right that we target support to those who need it most while we continue our work to fix the foundations and stabilise the economy – which is the best way to support pensioners in the long-term and is what has allowed us to deliver our commitment to the triple lock.”