Ministers were warned about the impact of cutting the winter fuel allowance before they made a decision to go ahead with restricting the vital help for millions of pensioners
Hundreds of thousands of pensioners will be pushed into poverty due to cuts to winter fuel payments, official government data revealed on Tuesday.
Ministers were warned about the impact of cutting the vital help for OAPs before they made a decision to go ahead with the policy. Around 450,000 elderly people will be pushed into relative poverty and 300,000 will be pushed into absolute poverty by 2030 after housing costs. Relative poverty is when people can afford everyday basics like food, health needs and drinking water but nothing else and absolute poverty is when people cannot meet basic needs.
Labour announced it was cutting the £300 winter fuel allowance for 10 million pensioners in the summer. Chancellor Rachel Reeves announced the support would now be restricted to just OAPs on pension credit or other benefits. She said she was left with no other option after finding a £22billion black hole in the public finances left by the Tories.
The Department of Work and Pensions (DWP) on Tuesday published an internal analysis of the policy. It showed that ministers were aware of the number of pensioners that would be plunged into poverty but decided to continue with the decision.
Keir Starmer in September insisted he was not hiding an impact assessment on cutting winter fuel payments. “I know you think there’s a report on my desk which somehow we’re not showing you. There isn’t a report on my desk I’m not showing you, it’s as simple as that,” he said.
Updated modelling includes more up-to-date data on factors including wages and growth. The original modelling, which was used to inform ministers’ decision on the policy, showed that the number of pensioners in poverty would have increased even faster.
The Prime Minister insisted that the analysis released does not account for measures aimed at supporting pensioners. He said an uptake in OAPs applying for pension credit as well as the Government’s household support fund or warm home discount were not accounted for.
Speaking on Tuesday at a press conference in Rio de Janeiro, Brazil, Mr Starmer added: “And of course, on top of that, as we now know, the figure for the increase in state pensions for next year under the triple lock, because we’ve stabilised the economy, is about £470. And therefore pensioners will be better off because we’ve stabilised the economy.”
Ministers previously estimated that 880,000 households were eligible for pension credits who were yet to claim, meaning they were also set to lose out on the winter fuel allowance. The DWP has since undertaken an awareness campaign to encourage eligible people to apply for the benefit.
The release of the date comes after Scottish Labour said it would reinstate the winter fuel allowance for pensioners if it wins the Holyrood elections in 2026. Scottish Labour leader Anas Sarwar said all OAPs would be eligible but that payments would gradually lesson so that the richest people receive less.
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Liberal Democrat Treasury spokeswoman Daisy Cooper branded the figures “shocking” and call on the Government to U-turn on the policy. She said: “The Government must step up and do the right thing: finally reverse the Winter Fuel Payment cut. Cutting this allowance will drive more vulnerable older people into poverty, forcing them to choose between heating and eating.
“While the Conservatives undoubtedly left this Government a dire fiscal inheritance, that’s no excuse to push more pensioners into poverty as the temperature plummets. We cannot stand by and leave millions of older people to endure another winter in a cost of living crisis.”
DWP Secretary Liz Kendall said: “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 £22billion 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.”