Cutting winter fuel payments for pensioners will drive 100,000 more into poverty by 2026, the government has admitted
Tens of thousands more pensioners will fall into relative poverty next year as a result of Labour’s decision to means test the payment, worth up to £300, government estimates have shown.
The change, unveiled by Rachel Reeves in July, will strip winter fuel payments from around 10 million pensioners.
And, while 50,000 additional pensioners will face relative poverty as a result of the change next year, according to an official impact assessment, the figure jumps to 100,000 additional pensioners facing poverty from 2026 onwards.
The winter fuel payment is being restricted to only those claiming pension credit from this winter, aimed at saving the public purse £1.5bn a year.
Government analysis of the impact of its decision to restrict the payment was published by the House of Commons Work and Pensions Committee on Tuesday.
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.
And in a further blow to Sir Keir Starmer as the estimates were revealed on Tuesday, Scottish Labour appeared to undercut him as they pleded to reinstate the payment for thousands of pensioners north of the border if they win at Holyrood in 2026.
The SNP government had been due to introduce a replacement benefit in Scotland next April, but said they had been forced to push these plans back until late 2025 after Labour’s move left it £150m short.
Under the new plans announced by Scottish Labour leader Anas Sarwar on Tuesday, all pensioners in Scotland would receive the payment initially, but it would be tapered over the years to reflect the income of recipients, with those who are better off receiving less in the longer term.
Mr Sarwar said: “Scottish Labour will take back this devolved power from the DWP, reinstate the winter fuel payment, and deliver a fairer system to ensure that everyone who needs support gets it.” Sir Keir said it was “one of the features of devolution” that there could be different policies in parts of the UK.
But SNP social justice secretary Shirley-Anne Somerville accused Labour of “remarkable Orwellian double-think”, and said Mr Sarwar had “sat on his hands while his Westminster colleagues forced through this cut”.
Ms Kendall’s admission came as the government faced angry hordes of thousands of farmers descending on Westminster in revolt at changes to inheritance tax in the Budget. But, despite the furious crowds outside, a Labour source told The Independent they were more worried about the long-term electoral damage of the decision to cut winter fuel payments, warning that pensioners will not forget the change.
Despite fierce criticism of the policy from his own backbenches, Sir Keir Starmer won a vote on the change in parliament, with MPs backing the measure by 348 to 228.
After the change, the government has been frantically writing to affected pensioners reminding those eligible to claim pension credits before Christmas.
The Independent last month revealed that many less well-off pensioners, who can claim pension credits instead, face months-long delays in processing forms, meaning they still may not receive the cash this winter.
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.”
And Liberal Democrat Treasury spokeswoman Daisy Cooper 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.”
Ms Kendall said the Labour government had been “forced” to limit the payment due to the “£22bn 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 £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.”
A government spokesperson said: “Internal modelling on poverty estimates was produced as part of routine policy advice. The modelling is subject to a range of uncertainties and does not take into account the significant work we’re doing to encourage pension credit take-up. Our awareness drive has resulted in a 152 per cent increase in claims since July.
“The modelling also doesn’t reflect that we have put in place extra support for those who need it most, such as our extension of the household support fund. Many pensioners will also benefit from the £150 warm home discount and cold weather payments to help with energy bills and millions of pensioners are also set to benefit from an increase of up to £470 to the state pension in April.
“This government inherited a £22bn black hole in our public finances, which means we needed to take tough decisions to balance the books. We continue to urge pensioners to check their eligibility for pension credit to ensure as many people as possible receive the support they’re entitled to.”