What's happening to Winter Fuel Payments?

03 September 2024

Written by Retirement Line

As the new Labour government settles into office, many retirees are keen to see if any policy changes will affect them. One of the changes already announced is the introduction of means-testing for Winter Fuel Payments. 

Winter Fuel Payments were introduced as a universal benefit in 1997. They provide financial support to pensioners in England and Wales during the winter when fuel bills are higher. The amount payable varied, with a maximum of £300 depending on the recipient's age and who they live with. 

Traditionally, these payments have been available to all individuals of State Pension age. It meant that they all received a tax-free sum to top-up their pension income. But now, Winter Fuel Payments will only be made to retirees who receive specific means-tested benefits.

Cuts to winter fuel payments from 2024

Winter Fuel Payments will now only be made to households over State Pension age who are in receipt of pension credit, universal credit and certain other benefits.

Those eligible will receive £200, and those who are 80+ will receive £300. The payments are only made to homes in England and Wales. Other arrangements are made by the devolved administrations in Scotland and Northern Ireland.

The changes have been made with immediate effect. This means that individuals who are not eligible will not receive Winter Fuel Payments from this winter.

The change was made to target support at the country’s poorest pensioners. However, the government’s plans have sparked concern among campaigners. 

Caroline Abrahams, the charity director at Age UK, said: “Our initial estimate is that as many as 2 million pensioners who badly need the money to stay warm this winter will not receive it and will be in trouble as a result – yet at the other end of the spectrum well-off older people will scarcely notice the difference – a social injustice.”

However, Age UK also estimates that around 800,000 older people in the UK are eligible for Pension Credit but are not yet claiming it. This could mean hundreds of thousands of the poorest pensioners will miss out on Winter Fuel Payments, despite being eligible.

If you are a pensioner on a low income – under £218.25 a week for single pensioners and under £332.95 for couples – visit the Pension Credit page at gov.uk for information on how to apply.

Why is the government making these cuts?

Chancellor Rachel Reeves revealed the change in a speech at the end of July. It’s part of a series of spending cuts to help fill a £22 billion black hole in the public finances. Means-testing Winter Fuel Payments is expected to save the Treasury £1.4bn this year and £1.5bn next year.

In the winter of 2022-23, some 11.4 million people received Winter Fuel Payments, alongside extra one-off cost of living payments of up to £300. This winter, however, it is estimated that just 1.5 million people will be eligible for the means-tested payment.

These changes come amidst a broader context of rising energy prices and economic uncertainty. According to the Office for National Statistics in February, energy prices have exacerbated the financial strain on many households. Some 41% of adults who pay energy bills say it’s very or somewhat difficult to afford them.

The government has committed to addressing these issues with a comprehensive energy policy. This includes price caps and increased investment in renewable energy sources. 

Am I eligible for Winter Fuel Payments?

Winter Fuel Payments will now be made to households in England and Wales that include someone born on or before 22 September 1958 who qualifies. You can call the Winter Fuel Payment helpline on 0800 731 0160 if you have any enquiries or you do not receive your payment. To be eligible, you must be living in England or Wales during the qualifying week of 16–22 September 2024, and receive one of the following means-tested benefits:

• Pension Credit

• Universal Credit

• Income Support

• Income-based Jobseeker’s Allowance

• Income-related Employment and Support Allowance

If you think you might qualify for one of the above benefits but have not yet put in a claim, make sure you get the ball rolling now. As well as the Winter Fuel Payments, a successful claim will mean you receive year-round financial support from the means-tested benefit you apply for.

Don’t forget these essential checks for retirees

Whether you are eligible for Winter Fuel Payments or not, there are some things you can do now to ensure you are getting the help you are entitled to:

• Carry out a benefits check. Use the Gov.uk online benefit checker to see if you are missing out on government support that you should be claiming. If you think you might be eligible apply for Pension Credit or other means-tested benefits as soon as you can. This will ensure you get all the support you are entitled to, and help to avoid delays in receiving any Winter Fuel Payments if eligible.

• Utilise energy efficiency programmes. Take advantage of government grants and subsidies such as Help to Heat to improve home insulation and reduce energy costs.

• Compare energy deals. Comparison sites such as Uswitch, GoCompare, Compare the Market and MoneySuperMarket are all good for energy supplier comparisons. MoneySavingExpert also offers an energy comparison service called the Cheap Energy Club.

The introduction of means-testing for Winter Fuel Payments may initially seem challenging for some. However, the change might mean that pensioners will be incentivised to claim for the full range of benefits they are entitled to. Stay informed and proactive to ensure you receive the support you are eligible for to help keep your home warm this winter.

Sources

Winter Fuel Payment cuts will help fill a £22 billion black hole in the public finances:Who is eligible for the winter fuel payment and how much will they get? The Telegraph. Accessed 02 August 2024.

800,000 people in the UK are eligible for Pensioner Credit but not claiming it: Up to 2m pensioners will struggle without winter fuel help. The Guardian. Accessed 02 August 2024.

Eligibility for Winter Fuel Payments: Winter Fuel Payment. Age UK. Accessed 02 August 2024.