Winter fuel allowance axe to leave 100,000 more pensioners in poverty

Scrapping the winter fuel allowance will leave an extra 100,000 pensioners in poverty, ministers admitted today.

Work and Pensions Secretary Liz Kendall revealed the estimate for the impact of the controversial policy in a letter to MPs.

Internal modelling shows that the move will increase numbers in 'relative' poverty after housing costs by 50,000 this year and next.

Stripping handouts - worth up to £300 - from everyone who does not already receive income-related benefits will push poverty levels up by 100,000 in 2026-27, 2028-29 and 2029-30.

The number in 'absolute' poverty is expected to be increased by 50,000 in each year.   

The figures emerged in a letter to the Commons Work and Pensions Committee.  

It 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... 

'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 and should not be added together or interpreted as cumulative data.'

The document added: 'Estimates are rounded to the nearest 50,000 individuals and the nearest 0.1 percentage point due to uncertainties inherent in the modelling approach. 

'This means that small variations in the underlying numbers impacted can lead to larger changes in the rounded headline numbers. 

'For example, an estimated increase in poverty in the underlying data of 74,000 would be rounded to 50,000, whilst an increase of 76,000 would be rounded to 100,000.' 

Tory shadow justice secretary Robert Jenrick said: 'Labour's own assessment shows scrapping winter fuel payments will place 100,000 more pensioners in relative poverty. 

'Meanwhile Labour are forking out billions on vanity projects. This is a cruel Government of self-service.'

But, speaking at a press conference at the G20 summit in Brazil, the Prime Minister said the modelling did not account for other measures aimed at supporting pensioners.

Sir Keir Starmer said: 'It's important for me to point out what was left out of that analysis.

'The first is the considerable uptake in pension credit was not accounted for in those figures, we've had a campaign to drive up pension credit, to get more pensioners onto pension credit, which obviously is not only a guarantee of the winter fuel allowance, but also gives the credit itself. So there's an additional benefit there.'

It also did not account for the household support fund or warm home discount, the PM 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 pounds,' he continued.

'And therefore pensioners will be better off because we've stabilised the economy.'

In another blow for the UK Government, Scottish Labour has announced that it wants to reintroduce the winter fuel payments.

The Scottish Government is scrapping plans to create a devolved equivalent of the payment after funding was cut.

But Anas Sarwar said Labour north of the border would create a devolved payment if it wins the keys to Bute House in 2026.

Under the plans, all pensioners 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: 'A Scottish Labour government will reinstate the winter fuel payment for pensioners in Scotland.

'The winter fuel payment was supposed to be a devolved benefit this year and there were additional resources available to the Scottish Government through the household support fund.

'That meant we could have taken a different approach in Scotland to support more households this year – instead, the SNP decided to hand the power back to the DWP (Department for Work and Pensions).

'For months I have said that the eligibility criterion of pension credit is too low and called for a Scottish solution to this issue.

'That's why 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.

'A UK Labour Government is clearing up the mess left by a chaotic Tory government – here in Scotland, people are demanding a new direction and in 2026 we have the opportunity to deliver it with a Scottish Labour government.'

Sir Keir said the Scottish Labour policy on reinstating winter fuel payments was 'one of the features of devolution'.

'There are, not infrequently, different approaches taken in different nations across the United Kingdom,' he added.