The government’s decision to restrict winter financial aid to pensioners only receiving pension credits could result in an additional 100,000 pensioners falling into poverty by 2027, according to new figures released by the Department for Work and Pensions (DWP).
In July, the government announced that it would no longer provide up to £300 in winter support to all pensioners, a move aimed at saving £1.5 billion annually. Instead, only pensioners in receipt of pension credits would be eligible for the payment. However, the DWP’s figures show that this change could have serious consequences, with the number of pensioners living in poverty set to rise sharply over the next few years.
In response to these findings, the cross-party Work and Pensions Committee launched a review on Friday to examine the growing issue of pensioner poverty. The review will focus on regional disparities, the impact on pensioners’ lifespans, and how current benefits, including the state pension, help prevent poverty. It will also assess how pensioners in poverty manage their living costs, including food, energy, and housing, and explore the role of pension credit in alleviating these challenges.
Labour leader Sir Keir Starmer defended the government’s decision, arguing that many pensioners currently receiving the winter payment do not need it because they are “relatively wealthy.” In an interview on BBC Radio Merseyside, Starmer emphasized the need to prioritize funding for vital public services like the NHS and schools, saying, “We’ve got to deliver for our NHS, for our schools, we’ve got to make sure that we’ve got public services that people can rely on, including, of course, pensioners.”
However, new figures reveal a concerning trend. By the end of the 2024-2025 financial year, 50,000 pensioners are projected to fall into “relative poverty after housing costs.” A similar number is expected the following year, with the total rising to 100,000 by 2027. Afterward, the number could fluctuate between 50,000 and 100,000 over the next few years. Relative poverty is defined as having an income below 60% of the median income.
Work and Pensions Secretary Liz Kendall acknowledged the potential impact but noted that the figures did not factor in the government’s plans to increase pension credit uptake. She emphasized that the government is focused on improving pension credit take-up as a means to support vulnerable pensioners.
Labour MP Debbie Abrahams, chair of the DWP Committee, expressed concern over the government’s approach. She stated, “It’s concerning that potentially tens of thousands would sink below the poverty line without other kinds of support. We want to hear from experts and pensioners to make recommendations that will ensure people get the support they need.”
The review is expected to provide critical insights into how the government can better support pensioners and avoid further increases in pensioner poverty.