The head of the Department for Work and Pensions (DWP) has conceded that poverty among older Brits is expected to surge dramatically by the end of this decade as a result of Labour policy. The grim forecast sees thousands more pensioners falling into hardship annually, as a direct result of cuts to the Winter Fuel Payment.
This bleak outlook was confirmed by the new Labour government, which is targeting a “£22 billion black hole” left by the Conservatives, announced major cuts to the previously universal benefit for pensioners in July. Anticipated to save £1.4bn per annum from this winter, only recipients of Pension Credit will henceforth be eligible for the payment, which can amount to £200-£300.
Liz Kendall MP, Secretary of State for Work and Pensions, openly acknowledged that DWP’s own projections regarding the impact of means-testing the Winter Fuel Payment disturbingly indicated that up to 300,000 pensioners would descend into relative poverty, with housing costs considered, due to this policy alteration.
In her correspondence to the Work and Pensions Committee, where she disclosed the hitherto unrevealed figures, Kendall noted that these estimates have been revised down to 200,000 – with an additional 50,000 pensioners projected to face poverty each year by 2029 as a direct consequence of the measure.
The DWP boss’ admission seems to contradict previous public statements claiming from Labour thAT there were no estimates for the changes to the Winter Fuel Payment. BBC’s Newsnight has reported that Prime Minister Sir Keir Starmer said in September: “There isn’t a report on my desk which somehow we’re not showing. I know you think there is a report on my desk, but there isn’t one.”
The changes to Winter Fuel Payment eligibility mean only those receiving Pension Credit will get the heating cost assistance this year, requiring a weekly income below £173 for singles or £236 for couples.
In a letter to the Work and Pensions Select Committee, Liz Kendall MP revealed: “At the time of the original policy decision, the internal modelling showed that compared to 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 in28/29.
“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.”
The fresh estimate that poverty among pensioners would increase by as much as 10 per cent by the end of the decade comes after the Office for Budget Responsibility updated its forecasts on the country’s economic outlook, the DWP minister said. Kendall also noted the figures did not include estimates on the impact of the government’s campaign to increase Pension Credit uptake.
The Labour minister also pointed out that these calculations do not take account for the potential effects of the government’s push to enhance Pension Credit uptake.
Meanwhile, Morgan Vine, director of policy at Independent Age, voiced grave concerns, saying: “It’s extremely concerning to see that energy bills are predicted to go up yet again next year. This means older people living on low incomes will have to stretch their already limited budget even further.
“Worryingly, many people in later life will have to manage this predicted bill increase without the winter fuel payment, a vital lifeline for many. Time is running out and the weather is turning bitter, but it’s not too late for the UK Government to change course and ensure everyone who needs the winter fuel payment receives it.”
