The Work and Pensions Committee has launched an inquiry into pensioner poverty, reacting to the means-testing of winter fuel payments. MPs will ask if current benefits and state pensions are sufficient to prevent poverty, and how to increase take-up of pension credit, while new figures show an increase in claims. A call for evidence is open until 6 January.

The inquiry, launched on 22 November, will also consider which groups are most affected by pensioner poverty, the impacts on health and the NHS, and how pensioner poverty and support vary in devolved nations and internationally. 

Committee chair Debbie Abrahams said the government’s decision to limit winter fuel payments mainly to those in receipt of pension credit has brought the issue of pensioner poverty into sharp focus. 

“We understand the rationale as part of the effort to restore the UK’s finances, but it’s concerning that potentially tens of thousands would sink below the poverty line without other kinds of support,” the MP for Oldham East and Saddleworth said. 

The committee said it wants to find out “what else is needed and how to improve access to and take-up of pension credit and other support”. 

The means-testing of winter fuel payments announced in July has been criticised by campaigners and caused unease among MPs. Union Unite said today it has applied to the High Court for a judicial review of the decision.

The government justified its move with the country’s financial situation. It said wealthy pensioners should not receive the payment worth up to £300 and promised to drive up the number of eligible people who claim pension credit, a benefit thought to be widely underclaimed. It also said linking the administration of housing benefit and pension credit would help identify eligible pensioners. 

Pensioner poverty has seen an uptick recently, after years of improvements. The gap between the average incomes of pensioners and working-age people narrowed significantly in the 2000s, but the reductions in pensioner poverty have gradually been reversing since then, said Heidi Karjalainen, senior research economist at the Institute for Fiscal Studies. 

“A key challenge for the government is that many pensioners are not claiming the means-tested support they are entitled to, in particular pension credit,” Karjalainen said. 

The IFS expects that bringing together the administration of pension credit and pensioner housing benefit for new claimants from 2026 will boost take-up, “but it is also crucial for the government to explore additional measures to further improve take-up rates”, she added. 

In the eight weeks between the winter fuel announcement and mid-September, 74,400 pension credit claims were made, up from about 29,500 claims in the eight weeks before the announcement, according to figures by the Department for Work and Pensions published on Thursday. This represents a 152% jump and could suggest headlines about winter fuel payments might have prompted some pensioners to check their eligibility, although it is unclear if there might be a seasonal pattern at play; a year-on-year comparison was not shown alongside the new figures. 

Carole Easton, chief executive of the Centre for Ageing Better feels more needs to be done. She said: “There is plenty of evidence to suggest that the current state pension and pension age benefits are inadequate.” 

She stressed that pensioner poverty in the UK is close to the highest level seen in the past 20 years, with 55% in deep poverty and 29% in very deep poverty, many of them from minority ethnic backgrounds. More than two in five of the poorest pensioners have no private pension. Easton therefore wants to see planned increases to the state pension age – to 67 from 2026 and 68 from 2044 – put on hold. 

“To tackle the concerning levels of pensioner poverty in this country, the Centre for Ageing Better recommends pausing proposals to further raise the state pension age until there is a plan in place to ensure that any changes do not push significant numbers of people into poverty,” she said.

“For this to happen, it must be matched with a considerable improvement in access to work for people in their 60s, and a holistic review of how our social security system supports us as we age,” she said, adding that the government must ensure that the poorest pensioners are not missing out on benefits they are entitled to. 

In July, the IFS found the increase in state pensions over the past decade has made lower income pensioners ineligible for other benefits, with a fall of 15% in average benefits other than the state pension paid to pensioners from 2011 to 2022.  Relative pensioner poverty increased from 2011 to 2022, from 13% to 16%, while between 2002 and 2011, pensioner poverty had fallen sharply from 25% to 13%.

Children are still by far the age group most likely to live in poverty, but people in their early to mid-60s now have the highest poverty rate of any adult age group, as state pension age has increased without mitigating measures, the health service is struggling and employers face no sanctions for discriminatory recruitment practices. The IFS said last year that the increase in SPA from 65 to 66 led to about a quarter of 65-year-olds ending up in poverty, more than doubling in one year.

Campaigners Women Against State Pension Inequality blame maladministration by the DWP for causing poverty among 1950s-born women, whose state pension age was increased. The Parliamentary and Health Service Ombudsman has recommended compensation, but pensions minister Emma Reynolds said in September that affected women should return to work or claim working-age benefits.