Government Estimates Reveal Potential Increase in Pensioner Poverty Due to Winter Fuel Allowance Cuts
The UK government’s own estimates suggest that an additional 50,000 pensioners will be living in relative poverty next year as a result of cuts to the winter fuel allowance. Chancellor Rachel Reeves previously announced that the £300 payment would be restricted to only the poorest pensioners – those eligible for pension credit.
According to the government’s projections, the impact of these cuts will be significant:
– In the years ending March 2025, 2026, and 2028, an additional 50,000 pensioners will be in relative poverty after housing costs
– By the years ending March 2027, 2029, and 2030, this number is expected to increase to 100,000 pensioners
Currently, approximately 1.9 million pensioners (around 15%) are already living in relative poverty. The new estimates suggest the winter fuel payment cuts would increase pensioner poverty by 0.5 percentage points. A person is considered to be in relative poverty if they have less than 60% of the median income.
Work and Pensions Secretary Liz Kendall emphasized that these estimates do not account for potential increased take-up of pension credit. The department has already written to 120,000 pensioners to encourage them to claim the credit they may be entitled to.
Kendall explained the decision, stating, “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.”
Political reactions have been mixed:
– Helen Whately, the Conservatives’ shadow work and pensions secretary, criticized the cuts, suggesting they would plunge 100,000 pensioners into poverty
– Daisy Cooper from the Liberal Democrats argued that the fiscal inheritance is no excuse to push more pensioners into poverty
– Sir Keir Starmer defended the policy, pointing out that the state pension would rise by £470 in the spring, making pensioners better off
Interestingly, Scottish Labour leader Anas Sarwar has diverged from Starmer’s stance, pledging to increase eligibility for pension credit if his party forms the next government.
The government has attempted to mitigate the impact by launching a campaign to encourage eligible pensioners to apply for pension credit. Kendall noted that the annual figures are rounded to the nearest 50,000, which means small variations in underlying numbers can lead to significant changes in the headline numbers.
It’s important to note that the cumulative total does not necessarily refer to the same individual pensioners, as people may move in and out of relative poverty depending on their personal circumstances.
The debate continues about the fairness and impact of these winter fuel allowance cuts on vulnerable pensioners.
