'Five out of six' pensioners below the poverty line set to lose Winter Fuel Payments, study finds

4 September 2024, 00:01 | Updated: 9 September 2024, 09:17

Five out of six pensioners below the poverty line are set to lose their winter fuel payment, a new study has found.

Chancellor Rachel Reeves announced millions of elderly Brits would lose access to the payment this winter, as she looks to fill an alleged £22 billion black hole in the nation’s finances.

But a new study by Lane Clark & Peacock (LCP) suggests this decision could hit the poorest pensioners hardest.

This report concentrates on the 1.9m pensioners who the DWP’s figures show are living below 60% of the national average income, which is widely used as the poverty line.

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LCP found that only 300,000 of these people are receiving Pension Credit, thus will retain their Winter Fuel Payments.

The rest, a whopping 1.6 million people, who are below what is commonly regarded as the “poverty line”, do not receive the benefit and so will lose out on the payment.

LCP suggested a number of ways the government could avoid the poorest pensioners in Britain losing their winter fuel payments.

The rest, a whopping 1.6 million people, who are below what is commonly regarded as the “poverty line”, do not receive the benefit and so will lose out on the payment.

LCP suggested a number of ways the government could avoid the poorest pensioners in Britain losing their winter fuel payments.

One solution includes paying only to households in Council Tax bands A-D; this was the approach taken for certain ‘cost of living’ payments in 2022.

Another suggestion would see the payment only to sent older pensioners (those aged 80+), who are more likely to spend more time at home.

Reacting to this study, LCP partner Steve Webb said: “There is a range of ways in which the government could target spending on Winter Fuel Payments, but our analysis shows that limiting payments only to those on pension credit will leave the vast majority of pensioners below the poverty line losing out.

“As an alternative, Winter Fuel Payments could be targeted on those in lower value properties, which would protect most poorer pensioners, but would dramatically reduce the saving to the Chancellor.

“Taxing Winter Fuel Payments would raise far less than the Government’s plans and could be administratively complex.

“It is ultimately a matter for politicians to decide on the balance between raising revenue and protecting the vulnerable, but it is clear that continuing payments only to those on pension credit will mean large numbers of already low income pensioners losing out”.

This comes after it was revealed pensioners will be forced to answer 243 questions over 22 pages in order to claim winter fuel payments.

They will be asked questions such as "Does you partner agree to your application?" and "Is your partner in hospital as an inpatient?" on the form.

The Department for Work and Pensions has been accused of deliberately making pension credit inaccessible over the form, the Telegraph reported.

Joanna Elson CBE, chief executive at Independent Age, told the outlet: “From our helpline, we already know that some older people are put off claiming due to the inaccessibility and length of the form. Pension credit is a lifeline to many of the older people who receive it.”

It comes after Chancellor Rachel Reeves announced winter fuel payments would be means tested, effectively cutting support for millions of pensioners.

The decision to scrap the payment for millions of pensioners came after the government accused the Conservatives of creating a “black hole” in public finances.

Speaking to the Commons in July, Rachel Reeves said: "Today I'm making the difficult decision that those not in receipt of pension credit or certain other means-tested benefits will no longer receive the winter fuel payment from this year onwards.

"The Government will continue to provide winter fuel payments worth £200 for households receiving pension credit or £300 to households in receipt of pension credit with someone over the age of 80.

"Let me be clear, this is not a decision I wanted to make, nor is it the one that I expected to make, but these are the necessary and urgent decisions that I must make.

"It is the responsible thing to do to fix the foundations of our economy and bring back economic stability."