Rachel Reeves announced yesterday that the number of eligible pensioners will drop from 11.4 million to only 1.5 million.
The number of pensioners who will receive help with heating costs this winter is ‘too narrow a group’, Martin Lewis said after cuts were announced yesterday.
Chancellor Rachel Reeves said that the annual payments of between £100 or £300 per person each year to help with fuel costs would no longer be universal to all pensioners.
Instead, only those on benefits such as Pension Credit would be entitled to receive the money.
Reducing the number of eligible pensioners by 10 million, from 11.4 million to only 1.5 million, is projected to save £1.4 billion this financial year.
But Mr Lewis said he had major concerns about the policy, and shared a formal statement to this effect on X.
‘Many pensioners eke out the £100 to £300 Winter Fuel Payments to allow them to keep some heating on through the cold months,’ he said.
‘While there’s an argument for ending its universality due to tight national finances, it’s being squeezed to too narrow a group – just those on benefits and Pension Credit.’
The targeting of Winter Fuel Payments is too narrow with the winter we have coming.
Pensioners were already due to get less as this will be the first time since winter 2022 they haven’t got the up to £300 extra winter fuel cost of living top-up.
The Energy Price Cap is likely to rise 10% this October and stay high across the winter, leaving most energy bills nearly double those pre-crisis, at levels unaffordable for millions.
Many pensioners eke out the £100 to £300 Winter Fuel Payments to allow them to keep some heating on through the cold months.
While there’s an argument for ending its universality due to tight national finances, it’s being squeezed to too narrow a group – just those on benefits and Pension Credit.
Yet again, those just above the thresholds will be hardest hit. This is often justified as there’s a ‘lack of household income data’ to allow other targeting.
However, there’s a usable precedent from the emergency energy crisis measures announced in April 2022, which I’d urge the Government to look at.
Then, a payment was made to homes in council tax bands A to D – as an imperfect but workable proxy for lower household incomes. That’d allow an additional group of lower to middle-income pensioners to keep the payments and mitigate bill shocks. Councils’ discretionary funds could also be funded as in April 2022, for the limited numbers who still need help but don’t qualify.
Plus, with this announcement, the Government has a huge moral imperative to ensure the 800,000 people eligible for Pension Credit who don’t get it, are informed, educated and helped through the process.
It is planning an awareness-raising campaign, but it needs to ensure that reaches every corner – and if possible proactively and personally contact people.
Pension Credit is a crucial gateway benefit, giving access to a host of other entitlements, and now with the link to the Winter Fuel Payment, it makes it even more important to ensure fewer miss out.
He said that over 800,000 people were eligible to claim Pension Credit but did not, so would also miss out on the Winter Fuel Payment.
To avoid them struggling even more, therefore, the government would need a major awareness campaign, he said.
Ms Reeves said she had to make the decision when faced with a ‘hole’ in funding of £22 billion, claiming the Tories had ‘covered up’ the scale of the shortfall in spending. She also announced major cuts to infrastructure, including the scrapping of a tunnel under Stonehenge, and said she would give pay rises to public sector workers.
Morgan Vine, head of policy at Independent Age, said the loss of Winter Fuel Payment ‘risks driving hundreds of thousands of older people into further financial hardship’.
He said: ‘We welcome the Chancellor’s intention to tackle the low uptake of Pension Credit, but means testing the Winter Fuel Payment now will mean too many older people will fall through the cracks and not get the vital financial support they desperately need, especially when household bills like energy are still extremely high.
‘Pension Credit has an unacceptably low uptake at just 63%. This means a staggering 880,000 older people who are eligible could be missing out on money they need to turn their heating on.
‘On top of this, every day we hear from older people who just miss out on Pension Credit but still struggle to pay their energy bills. They could now be heading into winter without this important lifeline.’
The payment is a devolved matter in Scotland and Northern Ireland.
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