Winter gas funds lower will drive 100,000 extra pensioners into poverty, minister admits | EUROtoday

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Cutting winter gas funds for pensioners will drive 100,000 extra into poverty by 2026, the federal government has admitted

Tens of 1000’s extra pensioners will fall into relative poverty subsequent yr because of Labour’s resolution to means take a look at the fee, price as much as £300, authorities estimates have proven.

The change, unveiled by Rachel Reeves in July, will strip winter gas funds from round 10 million pensioners.

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And, whereas 50,000 extra pensioners will face relative poverty because of the change subsequent yr, in keeping with an official affect evaluation, the determine jumps to 100,000 extra pensioners going through poverty from 2026 onwards.

The winter gas fee is being restricted to solely these claiming pension credit score from this winter, aimed toward saving the general public purse £1.5bn a yr.

Government evaluation of the affect of its resolution to limit the fee was printed by the House of Commons Work and Pensions Committee on Tuesday.

A letter to the committee from work and pensions secretary Liz Kendall mentioned: “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.”

Ministers have confronted criticism for slashing entry to the fee, with opposition MPs urging them to rethink the transfer.

The admission got here as the federal government confronted indignant hordes of 1000’s of farmers descending on Westminster in revolt at adjustments to inheritance tax within the Budget. But, regardless of the livid crowds outdoors, a Labour supply informed The Independent they had been extra frightened concerning the long-term electoral harm of the choice to chop winter gas funds, warning that pensioners won’t neglect the change.

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Despite fierce criticism of the coverage from his personal backbenches, Sir Keir Starmer received a vote on the change in parliament, with MPs backing the measure by 348 to 228.

After the change, the federal government has been frantically writing to affected pensioners reminding these eligible to assert pension credit earlier than Christmas.

The Independent final month revealed that many much less well-off pensioners, who can declare pension credit as a substitute, face months-long delays in processing types, which means they nonetheless could not obtain the money this winter.

Shadow work and pensions secretary Helen Whately mentioned: “Finally, the dam breaks and we get to see what Labour have known all along.

“Their winter fuel payment cuts are going to plunge 100,000 pensioners into poverty in the next few years.

“Clearly, Keir Starmer feels like that’s a price worth paying to make a political point. But I don’t think those pensioners would agree with him.”

And Liberal Democrat Treasury spokeswoman Daisy Cooper mentioned: “Faced with these shocking figures, the government must step up and do the right thing: finally reverse the winter fuel payment cut.

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“Cutting this allowance will drive more vulnerable older people into poverty, forcing them to choose between heating and eating.

“While the Conservatives undoubtedly left this government a dire fiscal inheritance, that’s no excuse to push more pensioners into poverty as the temperature plummets.”

Ms Kendall mentioned the Labour authorities had been “forced” to restrict the fee as a result of “£22bn black hole” it blamed the Conservatives for abandoning.

In her letter, she wrote: “Means-testing winter fuel payments was not a decision this government wanted or expected to take. However, 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 while we continue our work to fix the foundations and stabilise the economy – which is the best way to support pensioners in the long term and is what has allowed us to deliver our commitment to the triple lock.”

A authorities spokesperson mentioned: “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 £22bn 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.”