The new Labour Government has admitted that an extra 100,00 pensioners will be plunged into poverty following Chancellor Rachel Reeves's decision to effectively cut the Winter Fuel Payment for millions.
In a letter to the Work and Pensions Committee, Department for Work and Pensions (DWP) minister Liz Kendall revealed tens of thousands of older Britons will fall into relative poverty due to the up to £300 in energy bill support being means-tested.
Citing internal modelling, Kendall shared: "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."
Earlier this year, Chancellor Rachel Reeves revealed that the up to £300 in energy bill support will be means-tested going forward instead of being made universal for older Britons.
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Reeves is under fire for means-testing the allowance Getty/PAThe pensions minister highlighted in her letter these figures "represent the change in the numbers in poverty as a result of the policy change only"
The statistics are not reflective in what the overall figures will be for the year or in the years to come and should "not be added together or interpreted as cumulative data", Kendall emphasised.
Furthermore, the minister noted that this impact assessment does not take into account the impact of Pension Credit take-up since the initial announcement of the benefit's means-testing.
Prior to the policy change, all older people were able to claim Winter Fuel Payments once they reached state pension age.
Going forward, pensioners will now need to apply for Pension Credit to access the allowance, which is a means-tested benefit for those on low income administered by the DWP.
"As I outlined in my evidence, we are taking significant steps to encourage those pensioners who are entitled to claim Pension Credit to do so with the success of our campaign boosting applications by 152 per cent, and I will continue with this endeavour," Kendall added.
"For example, we have written to 120,000 pensioners in receipt of Housing Benefit who may also be entitled to Pension Credit to encourage them to claim.
"In the longer term, we are working to bring together the administration of Pension Credit and Housing Benefit, to ensure that pensioner households receive the benefits to which they are entitled."
Despite this claim, it is understood that The average wait for the means-tested benefit has doubled from 25 working days in September to 52 working days last month
The overall number of outstanding applications waiting to be processed has shot up by 125 per cent since the Chancellor's initial announcement of the cut in July 2024, The Big Issue reports.
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Rachel Reeves has defended the decision to means-test Winter Fuel Payments
GB NewsPension Credit applications are now taking two and a half months to process which far exceeds the DWP's own 50 day target.
A DWP spokesperson told The Big Issue: "We want to ensure all pensioners get the support they’re entitled to. These figures are a reflection of our successful pension credit campaign boosting applications by 152 per cent.
"Successful claims for pension credit can be backdated by three months, so all eligible claims made by December 21 would also receive a winter fuel payment as well as arrears of pension credit. We continue to urge anyone who thinks they may be entitled to Pension Credit to check now."
A Government spokesperson told GB News: "Internal modelling on poverty estimates was produced as part of routine policy advice. The modelling is subject to a range of uncertainties and does not take into account the significant work we’re doing to encourage pension credit take-up. Our awareness drive has resulted in a 152 per cent increase in claims since July.
"The modelling also doesn’t reflect that we have put in place extra support for those who need it most, such as our extension of the Household Support Fund. Many pensioners will also benefit from the £150 Warm Home Discount and Cold Weather Payments to help with energy bills and millions of pensioners are also set to benefit from an increase of up to £470 to the state pension in April.
"This government inherited a £22 billion black hole in our public finances, which means we needed to take tough decisions to balance the books. We continue to urge pensioners to check their eligibility for pension credit to ensure as many people as possible receive the support they’re entitled to."
