DWP announces £175 payments for state pensioners to fill Winter Fuel Payment hole

Liz Kendall has written an open letter over the new Labour Party government's decision to scrap universal Winter Fuel Payments. This year, the Department for Work and Pensions ( DWP ) Winter Fuel Allowance scheme means only those on means-tested benefits will receive the sums.

In her letter, ms Kendall says she is supporting pensioners through a £150 Warm Home Discount and £25 Cold Weather Payment scheme. Ms Kendall said: "During the evidence session, I outlined my commitment to being open and transparent with the public and parliament on all matters relating to DWP including on the Winter Fuel Payment. In line with that commitment, today, 19 November, this letter contains internal government modelling produced by the Department as part of routine policy advice."

Ms Kendall said: "At the time of the original policy decision, the internal modelling showed that compared to the numbers that would have been in poverty without this policy, restricting Winter Fuel Payment eligibility would result in each year in question an estimated additional 100,000 pensioners in relative poverty after housing costs in 2025/26, 50,000 in both 26/27 and 27/28 and 100,000 in 28/29. For absolute poverty after housing costs, it is estimated that an additional 50,000 pensioners will be in poverty in each year in question from 25/26 to 28/29.

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"However, this modelling has since been updated to incorporate more up-to-date OBR economic assumptions and to include the impacts in 24/25. Updating the economic assumptions changes the factors (wages, growth) affecting the median income and therefore using updated economic assumptions will change the projected poverty impacts.

"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."

Ms Kendall said: "We have also put in place extra financial support for the most vulnerable households including pensioners through the £150 Warm Home Discount to help with energy bills, the Cold Weather Payments and our extension of the Household Support Fund.

"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."