Winter fuel allowance axe will leave an extra 100,000 pensioners in poverty, ministers admit

Scrapping the winter fuel allowance will leave an extra 100,000 pensioners in poverty, ministers admitted today.

Work and Pensions Secretary Liz Kendall revealed the estimate for the impact of the controversial policy in a letter to MPs.

Internal modelling shows that the move will increase numbers in ‘relative’ poverty after housing costs by 50,000 this year and next.

Stripping handouts – worth up to £300 – from everyone who does not already receive income-related benefits will push poverty levels up by 100,000 in 2026-27, 2028-29 and 2029-30.

The number in ‘absolute’ poverty is expected to be increased by 50,000 in each year.   

The figures emerged in a letter to the Commons Work and Pensions Committee.  

Internal modelling shows that the move will increase numbers in ‘relative’ poverty after housing costs by 50,000 this year and next, and 100,000 in 2026-27

It 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… 

‘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. 

‘The poverty impacts represent the change in the numbers in poverty as a result of the policy change only. 

‘They are not an estimate of the change in overall poverty each year or over time and should not be added together or interpreted as cumulative data.’

The document said: ‘Estimates are rounded to the nearest 50,000 individuals and the nearest 0.1 percentage point due to uncertainties inherent in the modelling approach. 

‘This means that small variations in the underlying numbers impacted can lead to larger changes in the rounded headline numbers. 

‘For example, an estimated increase in poverty in the underlying data of 74,000 would be rounded to 50,000, whilst an increase of 76,000 would be rounded to 100,000.’ 

Rachel Reeves announced the controversial winter fuel move in the summer