Rachel Reeves has ignored calls to reverse her winter fuel payment cuts amid warnings that five in six pensioners living in poverty will be hit out.
The Chancellor said pensioners are £900 “better off” than they were a year ago as she defended plans to take hundreds of pounds off them this year.
In a scathing critique in the House of Commons, Ms Reeves was told she had made a “frightening political choice to balance the books of this country on the weakest of shoulders”.
Analysis by a former pensions minister has shown that 1.6 million elderly people who are below the poverty line will not qualify for payments this winter.
Sir Steve Webb, who is now a partner at pensions consultancy LCP, said: “There are a number of ways the government could target spending on winter fuel payments, but our analysis shows that limiting payments to just those with pension credit will leave the vast majority of pensioners below the poverty line missing out.
“Alternatively, winter fuel payments could be targeted at those in lower value properties, which would protect the majority of poorer pensioners but would drastically reduce the Chancellor’s savings.
“Taxing winter fuel payments would raise far less than the government plans and could be administratively complex.
“Ultimately it is a question for politicians to decide on the balance between raising revenue and protecting the vulnerable, but it is clear that continuing payments only to those with pension credit will mean that large numbers of low-income retirees will miss out.”
Ms Reeves is scrapping the universal winter fuel allowance, which is £200 for pensioners under 80 and £300 for those over 80, to save £1.5 billion.
Instead, only retirees claiming pension credit and some other benefits will be eligible.
This means that the 11.4 million people currently benefiting will fall to just 1.5 million.
The LCP analysed statistics from the Department for Work and Pensions on low-income pensioner households.
The poverty line is broadly measured as a household income below 60% of the national average, which equates to around 1.9 million people over pension age across the UK. Only around 300,000 are receiving pension credit. Around 800,000 pensioners are eligible but do not claim it.
The research looked at other options to make winter fuel payments more targeted, including paying only to households in AD council tax bands, paying only to older pensioners aged 80 or bringing winter fuel payments within the definition of taxable income.
If it were found that linking to municipal tax bands would protect the vast majority of low-income retirees but would substantially reduce the amount saved by the government.
Paying only older retirees would still leave more than a million poorer retirees under 80 still losing out.
Bringing the payments into the tax net would raise only a modest amount – around £300 million – and would involve complex administration, the research suggested.
Ms Reeves faced pressure from her own MPs as well as the opposition as she faced MPs for the first time since the cuts were announced.
Labour’s Rachael Maskell warned that York’s average rent rise of 11.9% exceeded the state pension increase by £380 this year.
She said: “With the loss of cost of living payments and winter fuel payments, an increase in the energy price cap and cost of livingRetirees are worried about how they’ll stay warm this winter – just like me.”
Labour MP Paula Barker said charity Age UK reports there are around a million pensioners who “simply miss out” on winter fuel paymentnoting: “These are people living on modest incomes within £50 of the poverty line who will be left out due to a small occupational pension – including many in Liverpool Wavertree.”
Former Conservative minister Dame Harriett Baldwin said Ms Reeves had made a “terrifying political choice to balance the books of this country on the weakest of shoulders” by making changes to the winter fuel payment.
Wendy Morton, another former Conservative minister, said many retirees were “worried about the prospect” of losing their winter fuel payment “in which they trust”.
Liberal Democrat MP Steve Darling has raised concerns about the ability of pensioners to cope as we head into the winter period.
He said: “They haven’t had time to save up for this and so it’s a complete shock to them.”
The Daily Express is campaigning to restore the winter fuel allowance and supporting the Silver Voices petition calling on the government to change its mind.
Sign here at https://www.change.org/p/save-