Menu
Save, make, understand money

Household Bills

Government admits winter fuel cut could plunge tens of thousands of pensioners into poverty

Government admits winter fuel cut could plunge tens of thousands of pensioners into poverty
Emma Lunn
Written By:
Posted:
20/11/2024
Updated:
20/11/2024

Modelling from the Department for Work and Pensions (DWP) estimates the number of pensioners that could struggle financially due to the policy change.

The Government announced in July that from this winter onwards, only pensioners receiving Pension Credit would get the £200 cash. Previously, it was an automatic payout to people over the state pension age.

Up until now, an impact assessment on the plans had not been published. But Liz Kendall, work and pensions secretary, has now published an open letter showing internal Government modelling.

The letter 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.”

The poverty impacts represent the change in the numbers in poverty as a result of the policy change only. They are not an estimate of the change in overall poverty each year or over time.

Sponsored

How life insurance can benefit your health and wellbeing over the decades

Sponsored by Post Office

The figures, which are rounded to the nearest 50,000, take into account the impact of housing costs, but not of thousands more people claiming Pension Credit since the policy change was announced.

Kendall wrote in the letter: “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 £22bn 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.”

Choice ‘between heating and eating’

Daisy Cooper, the Liberal Democrats’ treasury spokesperson, said: “Faced with these shocking figures, 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. The Liberal Democrats voted against this cut and will continue to stand up for struggling pensioners.”