Hard up: Pensioner povert is on the rise, a study has reported

A Labour minister has blamed council tax rises for an unexpected increase in the number of pensioners living in poverty.

Pensions Minister Mike O'Brien indicated it was one of the central reasons why 300,000 more elderly people have fallen below the poverty line.

The total number of poor pensioners is now 2.8million.

Mr O'Brien's admission appeared to be an indictment of Labour's 'stealth tax' policies, which have seen the average council tax bill more than double since 1997.

The figures published yesterday laid bare the extent of the poverty trap faced by pensioners who survive on a fixed income.

As the rest of the population has become more wealthy, they have been left behind.

And because many have larger homes - bought many years ago when they were
worth much less than they are now - they are particularly badly affected by council tax increases.

Mervyn Kohler of Help the Aged said: 'The Government should be mortified by the latest rise in pensioner poverty - in a twelve-month period, that's around 822 pensioners each day.

'When older people live on a fixed income it is virtually impossible for them to pull themselves out of poverty. Pensioners often have to cut back on essential household items to survive. This is a disgrace.'

Gordon Lishman of Age Concern added: 'Older people have been hit particularly hard as living costs have gone through the roof-half of those affected by fuel poverty alone are pensioners.'

Mr O'Brien said that the latest poverty figures, which cover the financial year ending in March 2007, were 'a disappointment'.

One of the reasons behind the increase was Gordon Brown's decision not to repeat the £200 council tax rebate given to pensioners in 2005, Mr O'Brien added.

'What we have seen since then is that council tax has come under control at 4.9 per cent increase each year,' he said. 'So that one-off payment was not allocated for this year.'

The figures will also disappoint Mr Brown, who has made tackling poverty a personal priority.

Until yesterday, the Prime Minister had presided over consistent annual falls in the official tally of poverty among the elderly since becoming Chancellor.

Deepening poverty among the elderly comes on top of concerns highlighted by the Daily Mail's Dignity for the Elderly campaign over falling levels of care for the frail and vulnerable elderly in residential homes.

Mr Brown has already introduced means-tested benefits as his main weapon to reduce poverty among pensioners.

Pension Credits currently guarantee an income of £124.05 to single people and £189.35 to couples.

But there are concerns that many pensioners find the byzantine means-testing system too daunting. Others are thought to be to proud to ask for handouts.

When the benefits were introduced in the late 1990s, 2.8million pensioners were poor by the Government's favoured measure - they lived on less than 60 per cent of median household income.

That number gradually fell over the succeeding years until in the financial year 2005/6 there were 2.5million poor pensioners.

However the 2006/7 figures published yesterday contained a wholly unexpected leap back up to 2.8million.

Christine Melsom of the pensionerled council tax protest group Is It Fair? said: 'This is the first admission that council tax has hit pensioners.

'They have acknowledged that council tax was out of control, and that it has hurt us. It has hurt us hard, and it continues to hurt us.'

The independent Institute for Fiscal Studies said the figures were not 'welcome news' for Mr Brown.

A spokesman added: 'The actual increase is both statistically significant and unexpectedly large.'

Employment and Welfare Reform Minister Stephen Timms acknowledged that the figures were disappointing. He said: 'Over the last year or two we have on some levels slipped back.

'It's encouraging that there has been continuing progress in reducing material deprivation and persistent poverty among both children and pensioners - reducing relative poverty though is difficult, particularly at times of strong economic growth.'

The number of pensioners living in poverty has risen for the first time in eight years due to council tax hikes and increasing living costs, an official report showed today.

In total, there are 2.1 million OAPs suffering severe financial hardship - up 200,000 - the figures from the Department for Work and Pensions showed.

The DWP calculated poverty before and after household costs . These figures related to after household bills have been paid.

'It's either pay for food or pay the bills'

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Gabrielle Edwards, 62, has to pick between paying the bills or paying for food

Gabrielle Edwards, who relies on the state pension and its top-up benefit, the pension credit, says that she struggles to manage on her income.

'I can't afford to buy clothes,' the 62-year-old divorcee said. 'My daughters help me out. But sometimes I find myself taking £10 from them just to tide me over the weekend. I hate it. I hate relying on other people.'

Mrs Edwards is retired and cannot return to work because of mobility problems and arthritis.

She has two sources of income - her state pension, currently £86.28 a week, and pension credit of £88.12.

In 1998, the average council tax bill sent out by Mrs Edwards' local town council, Mid-Sussex, was £728. This year that had risen to £1,444.

Mrs Edwards said: 'I have two things that keep me going - my car and my TV.

'The car is paid for from my mobility allowance - the benefit goes directly to pay for it.

'I spend around £20 a week on petrol, because I like to go to Brighton to see my grandchildren. When you are buying petrol, £5 goes nowhere.

'At the moment I have a water bill for £783 and I don't know how I am going to pay it. I have a phone bill of £116, and £66 of that is rental and VAT, which means they are costing me £20 a week. It is either pay for food or pay the bills.

'My daughters help with clothes, but I hate living like this. Sometimes I sit on the edge of my bed and I cry.'