Experts not convinced UK Government will save cash by limiting winter fuel payments

The savings from limiting the winter fuel allowance to only the poorest pensioners are unclear and could be outdone by a rise in those seeking pension credit, a group of experts has warned.

The Social Security Advisory Committee (SSAC), which provides statutory advice to ministers on benefits, also admonished the Government for not having provided an impact assessment of its plans before they were brought into law.

Chancellor Rachel Reeves announced the universal benefit would be limited to only the least well-off pensioners not long after Labour came into power, as part of a bid to plug what she called a £22 billion “black hole” in the public finances.

The number of pensioners in receipt of winter fuel allowance is set to fall from some 10.8 million to 1.5 million people, which could save the Government £1.5 billion.

Means tested

Only those in receipt of pension credit and other means-tested benefits will still qualify for the payment, following a Commons vote in early September.

Since Ms Reeves’ announcement at the end of July, there has been an uptick in the number of people applying for pension credit, following work to raise awareness of the often under-claimed benefit.

But in a letter to the Department for Work and Pensions published on Wednesday, the SSAC said “it is not clear how the tension between the two goals of fiscal savings and increased take-up of pension credit is resolved within the plans”.

The committee also said it was disappointed no impact assessment of the plans had been made by the Government, and suggested it was not convinced by Sir Keir Starmer’s assurances that pension credit take-up would prevent a number of pensioners from falling into poverty.

It added: “Given the scale of pensioners who will be affected by this change, and the speed at which it is being introduced, we are not similarly reassured that this will be the case and are of the firm view that a more detailed assessment is urgently required, in particular, on the potential poverty impact.”

Safeguards

The SSAC suggested further safeguards were also needed for pensioners in receipt of other benefits, including child tax credits and disability living allowance.

Downing Street said scrapping the universal benefit was “not a decision that we wanted to take”, but pointed to the need to address ailing public finances as the reason behind the move.

A No 10 spokeswoman added: “When it comes to winter fuel our position remains that we remain focused on ensuring that those eligible for that support are receiving it.

“There continues to be effort under way in the Department (for Work and Pensions) to ensure that people are applying for that and receiving back-dated payments where eligible.”

‘Not fit for purpose’

Shadow work and pensions secretary Mel Stride said: “The Government’s own advisory body has stated that winter fuel payment legislation is not fit for purpose.

“It confirms that leaving almost 10 million pensioners out in the cold to pay for union pay rises will have a huge impact on pensioners already in poverty. Many will face the dreadful choice between heating and eating caused by this Labour Government.

“Labour have 13 days to reverse this policy before the Budget. Now is the time for them to follow their own advice, and unpick this cruel policy.”