Winter fuel payment

In 2010, an initial claim for Pension Credit cost £350 to process and another £50 to review each year. I have no up to date figures but one can only assume that, 15 years on, it is more expensive.

For all the trumpeting about encouraging 800,000 more eligible people to claim Pension Credit the DWP figures provide a different picture of what has actually happened:

www.gov.uk/government/statistics/pension-credit-applications-and-awards-february-2025/pension-credit-applications-and-awards-february-2025

For year-to-date 2024 to 2025, DWP has received 300,000 Pension Credit applications, a significant increase compared to 251,100 Pension Credit applications received across the whole of 2023 to 2024 with 5 weeks of 2024 to 2025 remaining.

Comparing the period since the announcement that Winter Fuel Payments (WFP) will be means tested (29 July 2024) with the comparable 2023 to 2024 period, DWP has:

Received 235,000 Pension Credit claims, an 81% increase or 105,100 extra applications on 2023 to 2024. Cleared 232,200 Pension Credit claims, a 92% increase or 111,100 extra clearances on 2023 to 2024: of which, 117,800 Pension Credit claims have been awarded, a 64% increase or 45,800 extra awards on 2023 to 2024 (114,500 claims have not been awarded, a 133% increase or 65,400 extra not awarded claims on 2023 to 2024).

So as an experiment to encourage 800,000 people to claim Pension Credit, it has been a failure, just as it was when Gordon Brown first intoduced WFP in 1997 with a higher payment to those in receipt of (what was then) Income Support - to encourage more people to claim IS. They didn't. That was why the payment was soon made universal and should have remained so.

For the record, the National Insurance Fund, from which SP and other contributory benefits are paid, is awash with money, more than three times in reserve than there needs to be, some 86 billion compared to the around 25 billion contingency required.

www.gov.uk/government/news/up-rating-report-2025-report-on-the-national-insurance-fund

I'm trying to understand Silverbrooks but can't get a grasp on what you are recommending except to accept just how complex it is to means test - yet it has to be done in many areas

There was an 81% increase in applications, a 92% increase in clearances and a 64% uptick in awards. How does that say failure, Silverbrooks?

It would be interesting to know what income those who didn't qualify put forward, believing it to be "low". The government should be able to extrapolate and use that when deciding whether and by how much they can afford to increase the eligability level.

Those very close should apply each year as, as is the way of these things, a new other benefit or a depletion of savings can suddenly leave you in a qualifying position.

It is too late now to reverse the damage that this has done politically to Starmer's party. It will always be held against them and brought up by their opponents however much they tinker about with it now. it was a very silly thing to do, however they tried to justify it.
Gordon Brown (who, in my opinion, is worth 100 of Keir Starmer), believed in universal benefits, we all contribute and we all benefit. Starmer and Reeves do not, they believe in targeted help to the poorest. (or so they say)

But we aren't in the same financial situation as under Gordon Brown. How can Starmer/Reeves target the poorest if money is going to people who don't need the money (looking at benefits as a whole).

I don't understand why it isn't added to the state pension. As Silverbrooks has pointed out, the money doesn't have to be spent on fuel, so it's a general supplement for pensioners. It would then be taxed back progressively for higher earners rather than creating a cliff edge. However much the threshold is, there will always be those who just miss out and will feel aggrieved.

I think winter fuel allowance should definitely be paid to pensioners with an income above pension credit.

I do not see why means testing would be so difficult. They can work out if people are single or in a couple and change benefits accordingly. They means test Child Benefit and I don't hear people saying that it is too difficult to administer. Making the income level for Winter Fuel the same as it is for Child Benefit could be seen as fair.

I think Winter Fuel Allowance could be reinstated with people having to claim it, so rich pensioners who say they do not need it do not have to claim.

I really believe the pension credit cut off level is too low.

Wyllow3. Yes, but not with a generation of people, many of whom may be reluctant or even unable to ask for help. The barriers to claiming have been well documented.

Read the paper about the experiment that the Coalition did when Steve Webb was Pensions Minister. They identified potential PC claimants, paid money into their banks accounts and invited them to claim. Still they didn’t.

assets.publishing.service.gov.uk/media/5a7a1600e5274a319e777c0a/795and796summ.pdf

PoliticsNerd. Fewer than 46,000 additional successful claims since the universal WFP was withdrawn versus the 800,000 said to be eligible for PC. That’s a failure in my book.

A large proportion of the 8 million plus pensioner households lost £200 or £300 for this experiment.

Someone really should challenge Baroness Sherlock on her claim when she was arguing against Baroness Altmann's fatal motion on 11 September 2024.

Some noble Lords have speculated whether, if every single person claimed pension credit who was entitled to it and got the winter fuel payment, we would save any money.

In a hypothetical world, if every single person who could get pension credit gets it and gets the winter fuel allowance, do you know what we would have done? We would have taken one of the least targeted benefits in the world and turned it into one of the best targeted benefits in the world. Let us see what happens when we get out there.

hansard.parliament.uk/Lords/2024-09-11/debates/C31BAC4A-8D15-44F8-9C58-417E31494AB9/SocialFundWinterFuelPaymentRegulations2024

Now we know what happened when they got out there, which was always going to be the case.

Time to think again.

They means test Child Benefit and I don't hear people saying that it is too difficult to administer.

Don’t they?

Again, Labour’s Baroness Sherlock:

Limiting the winter fuel payment to higher rate taxpayers would not begin to deliver the savings needed—and, trust me, it would be an administrative nightmare. If anyone doubts that, ask the last Government, which tried to do that to child benefit and they are still trying to figure it out now.

Means testing Child Benefit is done differently, retrospecively through the tax system and is, moreover, unfair to single working parents.

ifs.org.uk/articles/mess-has-been-made-child-benefit-and-clear-operation-may-not-be-easy

HMRC knows exactly how much pensioners earn. How difficult can it be to raise the WFP threshold to £15K for example?

Whitewavemark2

I think it would be very wrong (and I don’t think for one minute that they will) to completely reverse the decision. So many pensioners are relatively well off enough not to need it.

What?

Which world are you living in?

”Which world are you living in”

I’m living in the real world in which many pensioners are well off, as I’m sure you know yourself windmill.

growstuff

I don't understand why it isn't added to the state pension. As Silverbrooks has pointed out, the money doesn't have to be spent on fuel, so it's a general supplement for pensioners. It would then be taxed back progressively for higher earners rather than creating a cliff edge. However much the threshold is, there will always be those who just miss out and will feel aggrieved.

When you read Hansard, it’s clear this was never meant to be a permanent payment. It was introduced for two years, £20 for all pensioner households but £50 for those on Income Support. Gordon Brown tasked Harriet Harman with increasing the uptake of Income Support just as Rachel Reeves tasked Liz Kendall to increase uptake of PC.

It didn’t work back in the late 1990s and it doesn’t work now.

WFP was never put on the statute book as part of the SP to be paid out of the National Insurance Fund and therefore subject to cost of living increases - hence the value of the WFP has gone down in real terms. The £200 cash paid in 2000 would have to be £300 now to have kept up with inflation let alone rises in fuel prices.

Leave it as is is and it would eventually have become as irrelevant as the £10 Winter Bonus or the 25p extra pension at 80 (which are paid out of the NIF).

That said, there’s plenty of money in the NIF to pay WFP if it were to have been made part of the SP. The Treasury would recoup between £40 and £135 in tax depending on someone’s marginal rate - probably between £40 and £80 from the majority of taxpayers.

But again there would still be unfairness as SP is taxable and Pension Credit is not. Someone whose income is only SP compared to someone on the same income but comprising SP and PC would be worse off - a very real danger due to fiscal drag which is bringing more people whose only income is SP into the tax net.

It’s a mess whichever way you look at it. It should have been left as a universal payment and uptake of Pension Credit dealt with as a separate issue. A political mistake affecting 8 million pensioner households for fewer than 46,000 additional successful Pension Credit claims.

It has been heartening to read here that so many agree that WFP was being paid to those who did not need it. However we still have people unhappy about how unfair it was to remove it from all pensions. No one likes their sweeties being taken from them but we all have to decide, cut our costs or increase taxes if the books are to be balanced. A very simplistic point of view I know, I am no economists but really, benefits are to help those in most need.

Sweeties don't keep you warm in winter Gin!!!

"... we all contribute and we all benefit. Starmer and Reeves do not, they believe in targeted help to the poorest. (or so they say)" (Ilovecheese).

Is that how your insurances work? I must check what my car or household insurance should be paying me out.

There is an issue with all insurance but more to do with with personality than politics.

If you're a glass half empty person you will be upset if you have to claim and upset if you don't.

If you're a glass half full person you will be happy you can claim and happy if you don't have to.

Universality is very expensive. Why do you think that it's a good thing? Being envious of the poor and incapacitated seems very odd to me.

merlotgran

HMRC knows exactly how much pensioners earn. How difficult can it be to raise the WFP threshold to £15K for example?

While HMRC know what SP someone has, as DWP tell them, HMRC do not know what other income someone has until the end of the tax year, either through employers/pension funds submitting their annual P35 returns or someone making a self assessment.

Please explain how DWP could make an income based in-year payment in say November 2025 to help with winter fuel costs for say October 2025 to March 2026 when HMRC won’t know what someone’s income is until, at the earliest May 2026, or possibly 31 January 2027 the deadline for self-assessment. That would warrant a lot of payment clawback or retrospective claims - another costly administrative task.

Gin

It has been heartening to read here that so many agree that WFP was being paid to those who did not need it. However we still have people unhappy about how unfair it was to remove it from all pensions. No one likes their sweeties being taken from them but we all have to decide, cut our costs or increase taxes if the books are to be balanced. A very simplistic point of view I know, I am no economists but really, benefits are to help those in most need.

And, of course, the WFA was not removed from all pensioners. Those most in need still receive it.

Well, Gosh. I never saw that coming.
Nothing to do with the disastrous election results for Starmer, obviously.

What concerns me rather more is where the money for these payments is to come from, being as it was necessary to cut the payments originally to fill in the £22 billion hole Labour claim to have inherited.

PoliticsNerd

"... we all contribute and we all benefit. Starmer and Reeves do not, they believe in targeted help to the poorest. (or so they say)" (Ilovecheese).

Is that how your insurances work? I must check what my car or household insurance should be paying me out.

There is an issue with all insurance but more to do with with personality than politics.

If you're a glass half empty person you will be upset if you have to claim and upset if you don't.

If you're a glass half full person you will be happy you can claim and happy if you don't have to.

Universality is very expensive. Why do you think that it's a good thing? Being envious of the poor and incapacitated seems very odd to me.

I don't really understand your point here, PoliticsNerd Universal benefits are just a different kind of politics.
Is Universality really so expensive? a proportion is recouped in tax and there is no need for huge advertising campaigns to try and encourage people to apply for benefits that some people still see as "charity".

"Fewer than 46,000 additional successful claims since the universal WFP was withdrawn versus the 800,000 said to be eligible for PC. That’s a failure in my book."

Ah, you seek perfection, not seeing it as the enemy of the good. I think we will have to agree to differ.

The simplest solution is to means test the pension at the beginning (Australian style) although I doubt we would see it in our time or ever applied to those currently in receipt of a state pension.

Whitewavemark2

I think it would be very wrong (and I don’t think for one minute that they will) to completely reverse the decision. So many pensioners are relatively well off enough not to need it.

I agree but I’d like to see the threshold increased.

Those who say “ increase the threshold”, which threshold? The level for Pension Credit or taxation? Or a separate means test for WFP?
I wonder what would happen if WFP became something you had to apply for? ( Not people on Pension Credit, of course, as they would get it anyway. )
I suspect those who need it most would include those who struggle with applications, and those who remain unaware of their entitlement.
People who don’t need it might still apply in order to donate the money to charities, whose work is very much needed to plug the gaps in society.
There are no easy answers apart from making it a universal benefit for pensioners again.

Well we can all hope for Starmer to do the right thing but on past experience I doubt he will.

He shouldn't have withdrawn the payment in the first place.

^”Well, Gosh. I never saw that coming.
Nothing to do with the disastrous election results for Starmer, obviously”^

eazybee isn’t it weird that folk criticise KS for ‘not listening to the people’ and, when he does listen to the people, they criticise him with … ‘he’s only doing this because he’s listened to the people’.

I feel like I’m living in a parallel universe🙈