Around 1.6 million pensioners living below the poverty line and who do not receive Pension Credit are set to lose out as a result of the government’s decision to means test the Winter Fuel Payments, according to a report by the former pensions minister.
Sir Steve Webb, who is now partner at pension consultancy firm Lane Clark & Peacock (LCP), analysed Department for Work and Pensions (DWP) data on low-income pensioner households and found that in 2022/2023, there were 1.9 million people over the age of state pension living below what is commonly regarded as the poverty line, of which only 300,000 were estimated to be receiving Pension Credit.
The new Labour government announced that it would be restricting the winter fuel allowance only to those receiving Pension Credit or other benefits, and this would mean around five in six retirees living below the poverty line will miss out on help paying their winter fuel bills.
LCP said in its analysis published on Wednesday that one reason for this cohort not to be claiming Pension Credit—a means-tested benefit providing income support to low-income seniors—is that they are simply not claiming it, with the DWP estimating there could be around 800,000 pensioners in this position.
Another reason is that while these seniors may have enough money to cover the basic costs of living, such as energy bills and food, they also might have other costs like mortgages and rent, which if being paid out of their core income could be pushing them below the poverty line.
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