Cutting winter fuel payments to millions of OAPs might not save cash, say experts

The savings from limiting the winter fuel allowance to only the poorest pensioners are unclear and could be outdone by a rise in those seeking pension credit, a group of experts has warned

The savings from limiting the winter fuel allowance to only the poorest pensioners are unclear and could be outdone by a rise in those seeking pension credit, a group of experts has warned.

TheSocial Security Advisory Committee (SSAC) offers statutory advice to ministers on benefits, also criticised the Government for not providing an impact assessment of its plans before they were made law. Chancellor Rachel Reeves announced the move to limit the universal benefit to the least well-off as part of efforts to address what she described as a £22bn "black hole" in public finances.

The change is expected to reduce the number of winter fuel allowance recipients from around 10.8 million to 1.5 million, potentially saving the Government £1.5bn. Only pensioners on pension credit and other means-tested benefits will remain eligible for the payment after a Commons vote in early September.

Since Reeves' announcement at the end of July, there's been a surge in pension credit applications, spurred by increased awareness campaigns for this often under-claimed benefit. In a letter to the Department for Work and Pensions published on Wednesday, the SSAC said: "It is not clear how the tension between the two goals of fiscal savings and increased take-up of pension credit is resolved within the plans". .

The committee expressed disappointment that the Government had not conducted an impact assessment of the plans, and remained unconvinced by Labour leader Sir Keir Starmer's claims that increased pension credit take-up would prevent many pensioners from falling into poverty.

The committee said: "Given the scale of pensioners who will be affected by this change, and the speed at which it is being introduced, we are not similarly reassured that this will be the case and are of the firm view that a more detailed assessment is urgently required, in particular, on the potential poverty impact."

The SSAC also recommended additional safeguards for pensioners receiving other benefits, such as child tax credits and disability living allowance. A Downing Street spokeswoman acknowledged that scrapping the universal benefit was not a desired decision, but cited the need to address struggling public finances as the reason behind the move.

She added: "When it comes to winter fuel our position remains that we remain focused on ensuring that those eligible for that support are receiving it. " The Department for Work and Pensions is working to ensure eligible individuals apply for and receive back-dated payments.

Shadow work and pensions secretary Mel Stride said: "The Government’s own advisory body has stated that winter fuel payment legislation is not fit for purpose. It confirms that leaving almost 10 million pensioners out in the cold to pay for union pay rises will have a huge impact on pensioners already in poverty.

Many will face the dreadful choice between heating and eating caused by this Labour Government. Labour have 13 days to reverse this policy before the Budget. Now is the time for them to follow their own advice, and unpick this cruel policy."