One hundred thousand extra pensioners could be in poverty by 2027 due to the government’s decision to axe the winter fuel payment, according to modelling from the Department for Work and Pensions.
Labour‘s decision to remove the universal payment of up to £300 to the elderly – and instead make it only available to those on certain benefits – was widely criticised when it was made over the summer.
Up until now, an impact assessment on the plans had not been published.
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However, Work and Pensions Secretary Liz Kendall has now put the information in the public domain, after being asked to do so by the Work and Pensions Select Committee.
The figures project that 50,000 more pensioners could be in “relative poverty after housing costs” in the financial year ending 2025, a similar number the year after, and then 100,000 in the year ending 2027.
It then drops to 50,000 people in the financial year ending 2028, before going back up to 100,000 for the years ending 2029 and 2030.
However, Ms Kendall’s letter is full of caveats and context for the numbers.
The most important being that the numbers are not cumulative – i.e. there will not be 450,000 extra pensioners in poverty by 2030, but rather the figures show the change in each year compared to a scenario without changes.
So in 2030, there could be 100,000 more pensioners in poverty under the plans compared to a hypothetical 2030 with no changes made.
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Another caveat is that the smallest change the modelling will show is 50,000 people, so there is no midway point for the model between 50,000 and 100,000.
And a further explanation states that the model does not include other government policies – for example, the efforts to increase registrations for pension credit.
If someone gets the pension credit, they will get the new means tested winter fuel payment too, although the government says many eligible pensioners are not registered.
The letter notes that applications have gone up by 152%.
Ms Kendall says in her 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.”
Earlier today, the Scottish Labour Party said it would base its 2026 Holyrood campaign on having full winter fuel payments – putting it at odds with the UK-wide party.
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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% 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.”
Liberal Democrat Treasury spokesperson Daisy Cooper said: “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.”
