Pension credit applications soar after winter fuel payment cut, but only 5% are approved

Just 42,500 applications for pension credit have been approved over the past 16 weeks - less than 5% of the 880,000 people the Government said were missing out on the benefit in July

Pension credit claims have skyrocketed by nearly 150% since the Government revealed plans to means-test winter fuel payments, according to recent figures.

However, only 42,500 applications have been approved during this time - a fraction of the 880,000 individuals the Government claimed were not receiving the benefit in July. In the 16 weeks following July 29, when Chancellor Rachel Reeves announced that only those receiving the benefit would be eligible for winter fuel payments, around 150,000 pension credit applications were submitted.

Ms Reeves stated that this move would save approximately £1.5bn and was necessary to help fill a £22bn "black hole" in public finances, which Labour alleges was left by the previous Conservative government.

This surge represents a 145% increase in claims compared to the 16 weeks prior to the Chancellor’s announcement. However, approvals only increased by 17% during the same period, while rejections nearly doubled from 27,100 to 53,100.

Age UK expressed its disappointment at the high number of pensioners having their claims rejected, suggesting that the Government is struggling to keep up with the volume of applications. Caroline Abrahams, charity director at Age UK, commented: "The system was not designed to deal with so many applications all at once – a situation which is a direct result of the Government’s disastrous decision to severely ration the winter fuel payment with little notice."

The Treasury has been warned that there's still a chance to mitigate the impact on retirees struggling financially, before the adverse effects of a policy shift hit them this winter. Downing Street has asserted its commitment towards pensioners, with the Prime Minister's spokesman stating: "We’re working hard to ensure as many pensioners as possible take up the support they’re entitled to."

This message comes during a bitter cold period across the UK, with fresh health warnings from the Met Office for parts of northern England and the Midlands.

The government is proactively reminding elderly citizens to verify their eligibility for pension credit, reminding them that applications made by December 21 will result in backdated payments for both pension credit and the winter fuel allowance. The Department for Work and Pensions, expecting higher demand, has introduced 500 additional staff for processing benefit claims.

Pensions minister Emma Reynolds said: "We’re pleased to see more pensioners are now receiving pension credit and our staff are processing claims as quickly as possible.

"With December 21 approaching, my message is clear: check if you are eligible for pension credit and if you are then apply, as it unlocks a range of benefits including the winter fuel payment."

Following the Chancellor’s statement, recent data obtained through a freedom of information request by investment managers Quilter Cheviot revealed that approximately £250,000 has been spent on pension credit advertisements by the Government.

Rosie Hooper, a chartered financial planner at the company, said the figure is “surprising... given the importance of reaching those in need”.

Helen Whately, the Shadow work and pensions secretary, said: "The Government has said publicly that it wants everyone eligible for pension credit to sign up. But Labour knew all along that wouldn’t happen.

"The figures out today show us that three-quarters of a million of the poorest pensioners are likely to miss out on winter fuel payments this winter.

"This is the stark reality of Labour’s political choice to cut the winter fuel payment. Pensioners are asking – is this Government choosing to be this cruel or are they just incompetent? "

Liberal Democrat Treasury spokeswoman Daisy Cooper said the figures are a “damning indictment of the Government’s failure to protect pensioners this winter”.

She added: "Millions of vulnerable pensioners are still set to lose their winter fuel payment just as the cold weather bites. Ministers rushed through these unfair changes and now vulnerable pensioners are set to pay the price.

"We are now reaching the point of no return for the Government to recognise their mistake, scrap this unfair cut and avoid older people being forced to choose between heating and eating this winter."