Labour’s raid on winter fuel payments has already cost the taxpayer £380m after a surge in benefits claims, analysts have warned, substantially eating into the £1.4 billion saving claimed by Chancellor Rachel Reeves. The Telegraph has the story.
Chancellor Rachel Reeves claimed in July that stripping the winter fuel allowance from some 10 million pensioners would save £1.4 billion a year, citing a £22 billion “black hole” in the public finances.
But analysis suggests a surge in pension credit claims following the Chancellor’s announcement has already wiped out the higher benefits bill budgeted for by the Treasury.
Last year, the Government paid out £5.5 billion in pension credit to 1.35 million households, which Sir Steve Webb, former Pensions Minister, said would make a “dent” in the revenue from the winter fuel raid.
But the furore around Labour’s decision to restrict winter fuel payments to only those in receipt of pension credit spurred thousands of retirees to claim the benefit for the first time.
Mel Stride, the Shadow Chancellor, told the Telegraph: “Labour’s approach to the increased poverty it is creating is to encourage more pensioners to apply for pension credit. But that is substantially eroding the savings.”
Since Ms. Reeves’s announcement in July, claims to the Department for Work and Pensions (DWP) surged to an average of around 9,500 a week, compared to a previous level of 4,000, according to DWP figures.
Sir Steve, now a partner at pension consultants LCP, said the previous level of activity kept the pension credit caseload stable, balanced by an inflow of new claimants and an outflow of pensioners dying.
He added: “There is no doubt that the surge in applications for pension credit will reduce the savings from this policy, potentially costing the Government more than £200 million per year in benefits for pensioners.
“But even allowing for this cost, the Chancellor will still see a meaningful saving from taking winter fuel payments away from around 10 million pensioners”.
The Department for Work and Pensions (DWP) budgeted for an additional 95,000 claims in the financial year, assuming an average annual cost per pensioner of £3,800.
It anticipated a surge in applications triggered by the announcement would cost £370 million a year, but analysts Policy in Practice said Labour had not accounted for so-called ‘passported benefits’ linked to pension credit, such as council tax support and free prescriptions.
The company said the true average cost for a pensioner is likely to be £6,800 a year, and that Labour had therefore already spent £388 million on additional benefits. Any further claims in 2025, it said, would eat into the £1.4 billion of savings claimed by Ms. Reeves.
Worth reading in full.
Stop Press: Twenty Labour councillors have quit the party and formed an independent group, accusing Sir Keir Starmer of “abandoning traditional party values”, citing concerns including the decision to strip 10 million pensioners of their winter fuel payments and proposals that would create new “mega councils”. The decision of the councillors on Broxtowe Borough Council in Nottinghamshire means Labour has lost control of the council, with its number of councillors down to six from 26.
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All the zealots in the green revolution, gender fluidity, historical revisionist and racial balance movement are a rich source of income for those who want milk their fanaticism. They never miss an opportunity to jump on the purpose-designed bandwagon which is actually their exploiters’ gravy train.
Those of us who got in early on the Ed Miliband solar panel scam still have about 12 years of index linked 13% returns to look forward to. What’s more, it’s all paid for by those of you who didn’t have an uninterrupted southern aspect & spare £12k to fund the panels to start with.
A perfect inverse Robin Hood scheme, take from the poor & give to the rich.
Oh come on …… you have to own thousands of acres of British countryside and a handful of windmills to really benefit from the Eco Lunacy scam.
Not really——It was only better off people who could afford to install a solar panel and because it was subsidised it meant that poorer people were paying for wealthier people’s panels
Thanks for your article, Shimpling, and your Not-Financial-Advice
and well done for riding the wave of Green Lunacy. Yes, so-called “fossil fuels” made an inhospitable world hospitable, and the nutcases don’t know which side their bread is buttered.
Regarding my own strategy – it’s far simpler – the UK equivalent of VTSAX.
Stay sane, friend.
Cheers, and all the best for 2023!
You too, mate!
Marvellous article!
You’re most kind. Thank you very much.