Tens of thousands of pensioners are on a financial cliff edge because of the government’s decision to radically restrict winter fuel payments, a new analysis has revealed. The chancellor, Rachel Reeves, opted to introduce a means test for the payments, with only those on pension credit qualifying, stating it was one of the “difficult decisions” she had to make, as she accused the Tories of leaving £22bn in unfunded commitments.
The decision removes the payments from about 10 million pensioners in England and Wales. Officials said this weekend the policy would be among a package of measures “to fix the foundations of the economy”.
A new analysis by Policy in Practice, a social policy software and analytics company, suggests about 130,000 people will miss out on winter fuel payments in the UK because they are up to £500 a year over the threshold for receiving pension credit, making them ineligible for the benefit. Experts warned they may end up worse off than some of those qualifying for the payment. An estimated 850,000 older people are also eligible for pension credit in the UK, but not claiming it.
Deven Ghelani, the founder of Policy in Practice and one of the architects of the universal credit system, said: “Cliff edges in the benefit system are a growing problem. It’s great that pension credit can unlock access to housing benefit and council tax support, alongside a growing list including social tariffs, the warm home discount and now winter fuel payments. But it means that about 130,000 pensioners might be better off with a lower income.”
Jan Shortt, general secretary of the National Pensioners Convention, a campaigning organisation for older people in the UK, warned of the risk of higher hospital admissions and more deaths: “The real pain is going to be felt by those just above the entitlement for pension credit. They are on a ledge and some of them will drop off into silent poverty.