An estimated tens of thousands of pensioners will face poverty annually due to the winter fuel allowance restriction, as per government projections.
It is estimated that limiting the payment will result in an approximate increase of 50,000 pensioners living in relative poverty after accounting for housing costs in the upcoming year, with a further 100,000 individuals projected to be in the same situation by 2026, as indicated by official modeling.
Reductions in Winter Guel Payments Could Put 50,000 Pensioners in Poverty Next Year
In an effort to restore the nation’s financial stability, Chancellor Rachel Reeves implemented a cost-saving measure that restricts access to a benefit valued at up to £300.
The payment will be limited to those receiving pension credit starting this winter, with the goal of achieving significant cost savings for the organization.
The move has been criticised by campaigners and opposition parties, while Sir Keir Starmer’s colleagues in Scottish Labour have set out plans to partially reverse it.
Despite the official modelling, Sir Keir insisted elderly Britons would still be “better off” due to the increase in the state pension.
Work and Pensions Secretary Liz Kendall revealed the Government’s assessment of the impact in a letter to MPs, but stressed the figures did not take into account plans to increase the numbers on pension credit.
She told the Work and Pensions Committee: “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.”
Households in relative poverty have less than 60% of average (median) income in the current year.
The number of additional pensioners in absolute poverty – compared to the median in 2010/11 – is estimated to be 50,000 in each year.
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.
