According to Government estimates, the tightening of winter fuel payments will likely push 100,000 pensioners below the poverty line in 2026. In a bid to mend the nation’s financial situation, Chancellor Rachel Reeves has curtailed entitlement to the benefit – which is valued at up to £300 – as part of a cost-cutting strategy.
Starting this winter, the payout will only be available to those who are recipients of pension credit, with the goal of reining in £1.5 billion annually from the public purse. The policy change has faced backlash from campaigners and opposition parties, while Scottish Labour, colleagues of Sir Keir Starmer, are proposing to partially roll back the measure.
Despite projections from official analysis, Sir Keir has argued that senior citizens in the UK will still end up “better off” due to an uplift in the state pension. Work and Pensions Secretary Liz Kendall has disclosed the Government’s impact assessment in a correspondence to MPs, all the while emphasising that the predicted figures do not consider the anticipated increase in pension credit claimants.
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Speaking to the Work and Pensions Committee, she said, “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.”
She further noted, “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.”
Households in relative poverty are defined as having less than 60% of the average (median) income for the current year. It’s estimated that there will be an increase of 50,000 pensioners living in absolute poverty each year when compared to the median in 2010/11.
Ms Kendall has expressed that the Labour Government had no choice but to restrict payments due to the “£22 billion black hole” left by the Conservatives. In her correspondence, she stated: “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 £22 billion black hole we inherited.”
She further explained that the government’s priority is to direct support towards those most in need while working to stabilise the economy and maintain the triple lock on pensions, saying: “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.”
Additionally, she mentioned that the analysis does not consider the potential positive effects of efforts to increase pension credit uptake and ensure pensioners receive their entitled benefits.
Meanwhile, Sir Keir, addressing the issue at the G20 Summit in Rio de Janeiro, pointed out that the figures do not reflect the mitigating influence of the household support fund and warm home discount scheme.
“And of course, on top of that, as we now know, the figure for the increase in state pensions for next year under the triple lock, because we’ve stabilised the economy, is about £470,” he said. “And therefore pensioners will be better off because we’ve stabilised the economy.”
Debbie Abrahams, Labour chairwoman of the Work and Pensions Committee, expressed some concerns: “While we’re grateful for the Government’s transparency on this, there are some outstanding issues on the specific impact on older or disabled pensioners, and the figures say nothing of those floating just above the poverty line.”
“We remain concerned by the impact that restricting winter fuel payments might have on poorer pensioners. We’ll be watching the issue closely,” she continued.
Shadow work and pensions secretary Helen Whately revealed her stance: “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.”
and she added, “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.”
Liberal Democrat Treasury spokeswoman Daisy Cooper also chimed in, saying it was time for action: “Faced with these shocking figures, the Government must step up and do the right thing: finally reverse the winter fuel payment cut.”
The unease surrounding the policy has prompted Scottish Labour to promise that if they triumph in the 2026 Holyrood election they will restore the payment for thousands more pensioners.
Under the set out proposals, all pensioners would be guaranteed the payment at first, but adjustments would be phased over time to mirror the income levels of the recipients, with wealthier individuals receiving less as time goes on. Scottish Labour leader Anas Sarwar declared: “Scottish Labour will take back this devolved power from the DWP, reinstate the winter fuel payment, and deliver a fairer system to ensure that everyone who needs support gets it.”
Sir Keir commented on the distinctiveness of devolution that allows different policies within the UK regions.
Age UK reacted to government statements, with its confirmation saying “what we always knew,” that “brutally rationing winter fuel payment, as ministers made the choice to do, will swell the numbers of pensioners already living below the poverty line – this year and into the future”. Caroline Abrahams, Age UK’s charity director, added her voice expressing urgency: “Of course, we must all continue to do everything we can to encourage any older person on a low or modest income to claim pension credit, the main qualifying benefit to retain winter fuel payment, before December 21, but we know and the Government knows that this will not be enough to turn these numbers around.”
From the charity’s perspective, she questioned the situation’s allowance and its potential resolution: “At Age UK this leaves us asking how on earth has this been allowed to happen and, more importantly, will the Government, even now, take decisive action to protect older people in need? ” Meanwhile, Independent Age described the forecasted figures as “extremely alarming” and steadfastly called for the Government to rethink its stance on means-testing.
Morgan Vine, director of policy and influencing at the charity, made a compelling statement: “The UK Government’s own analysis has now revealed the extent of the devastating impact of limiting the payment to just those on Pension Credit. ” She emphasised the urgency for a response: “With this information now in the open, it is essential ministers put a stop to this policy change right away.”
The charity has also been exposed to distressing situations, as they highlighted: “We have heard ‘harrowing stories’ of older people wearing hats and coats in bed in a bid to stay warm,” while adding that the negative effects of the policy are already visible: “We can already see the terrible impact this policy decision is having, the older people living on a low income that we speak to feel forced into making drastic cutbacks”.
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