After a Labour Party government u-turn on the Winter Fuel Allowance, state pensioners are being warned government coffers aren’t seeing the benefits.
DWP to hand state pensioners extra £82 a week on top of Winter Fuel Payment
State pensioners have been warned the Winter Fuel Payment raid will raise £1.3bn less than planned – as more and more of them get a new allowance on average £82 a week. After a Labour Party government u-turn on the Winter Fuel Allowance, state pensioners are being warned government coffers aren’t seeing the benefits.
The Labour Party government’s decision to scrap – then revert – Winter Fuel Payments triggered soaring pension credit claims. The raid on pensioners was expected to save the Treasury £1.5bn.
But a combination of reversing the policy and rising pension credit claims now means the Government is expected to save just £227m instead. State pensioners are being warned it could mean other perks and benefits become a target for the government.
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DWP data shows 181,100 retirees were awarded pension credit last year – 57,200 more than a year ago. The surge means the Government is likely having to pay £223m extra in benefits every year.
Former Liberal Democrats Pensions Minister Sir Steve Webb, from LCP, said: “It is entirely welcome that more pensioners who are entitled to pension credit are now claiming what they are entitled to.
“But this surge in claims has put a further dent in the revenue from this ill-fated policy.
“Compared with the original plan to raise £1.5bn by means-testing winter fuel payments, the final saving could be barely one sixth of this amount.
“The Chancellor must wish she had never started down this path.”
A Department for Work and Pensions spokesman said: “By having an income threshold of £35,000 we’re ensuring that pensioners who need support the most receive it, whilst also making significant savings.
“Amid our biggest ever Pension Credit awareness campaign, between July 2024 and July 2025, 181,000 households were awarded Pension Credit, with awards worth on average £82 a week.
“We know that Pension Credit can be a lifeline to those on low incomes, and we are continuing to urge all pensioners who think they might be eligible to apply.”