Winter fuel payment

Hmmm! I take your point Silverbrooks. However it's calculated, I'm sure somebody will claim it's unfair. However, if a couple in a household is paying different tax rates, maybe it should be given to the individuals. There are all sorts of anomalies with couples and individuals with regard to benefits anyway - this would just be another one.

PS. I agree that it should be universal. Quite honestly, it's not a huge amount and (IMO) the fuss is disproportionate - certainly not worth the expense which complicated means-tested would cause. As long as it's spent, it will be generating tax one way or other.

Silverbrooks I've just read the report and confess I haven't a clue what the solution is.

If only the energy companies were "encouraged " to reduce their profits, everyone would benefit. Pensioners and young people struggling. Young children need ŵarm homes as well

Profits are needed to fund new investment so that we continue to have energy in the future.

The cost of new energy projects can run into billions, lower prices and smaller profits now mean energy shotages in the future..

In my opinion I think everyone of SP age should be able to claim WFA if they want to..... Those who don't need it then don't need to claim it.

Monica Shame the water companies didnt invest their vast profits to ensure clean rivers and beaches. And future supply of clean water

M0nica

Profits are needed to fund new investment so that we continue to have energy in the future.

The cost of new energy projects can run into billions, lower prices and smaller profits now mean energy shotages in the future..

Indeed - eye watering profits 'invested' right into shareholders bank accounts.

M0nica

Profits are needed to fund new investment so that we continue to have energy in the future.

The cost of new energy projects can run into billions, lower prices and smaller profits now mean energy shotages in the future..

While your defence of energy profits has an element of truth in it there are other reasons why our UK energy costs are so high.

We have the highest electricity prices in Europe because, despite the fact that alternative generation by wind, solar and hydro are far cheaper the price is set by the price of gas used in back up generators.

A large proportion of the profit made by electricity companies is, therefore, windfall profit. Profit generously shared with their shareholders, of course.

HelterSkelter1

Monica Shame the water companies didnt invest their vast profits to ensure clean rivers and beaches. And future supply of clean water

Agreed👏👏👏

Also, shame the energy companies didn’t invest some of their vast profits into updating the grid and energy infrastructure, making them fit for the future.

Both water and energy are being used as cash cows by largely foreign investors who are simply reaping in our money for their shareholders.

IMO the government should put a percentage cap on the annual profit these companies are allowed to pass on to their shareholders, and they should have to invest a percentage of their income into updating infrastructure. If they fail to do this, the government steps in and takes them over.

May seem somewhat draconian but the stats for the cost of energy in the UK, for the consumer, compared to the rest of the developed world are staggering.

Our energy companies have been ripping us off for years - enough is enough!

“The UK’s electricity prices are the highest in the developed world. This doesn’t just pinch the pockets of consumers. It also makes British steel and other goods far more expensive than those produced in other countries. The deal signed on Monday could change that by starting to reintegrate the EU and UK electricity and carbon markets.

In 2023, British factories paid 25.85p per kilowatt hour for power. That’s

four times higher than in the US;

2.6 times higher than South Korea;

nearly triple the price in Canada, Norway, Finland, Sweden, New Zealand and Portugal, which all charge less than 10p.

This discourages investors and weighs on British industry. The cost of running a steel mill in the UK, for example, is £50 million more a year than in France, according to British Steel.

“If you are building a new, big industrial plant, you want to go where energy is cheap, and right now that’s not the UK,” says Adam Bell, the former head of Energy Strategy at the Department for Business and Trade.”

From Sensemaker at the Observer today!

Maybe I’m an outlier here but, as a domestic user, I don’t feel ripped off.

I’m paying about the same now for fuel as I was five years ago. A spring/summer bill of £2 a day for gas and electricity and a winter bill of £5 a day for gas and electricity when the heating is on. In other words it costs just £3 a day to keep warm last winter, less than the price of a cup of coffee and the same as a single bus journey.

May 2021 £51.51
May 2022 £61.70
May 2023 £98.75
May 2024 £71.02
May 2025 £59.84

January 2022 £127.51
January 2023 £216.20 (height of energy crisis, snow for a week in December 2022)
January 2024 £187.07
January 2025 £148.77

My bill for clean water and waste is £1 a day.

I think that’s a very good idea Dorisdodar.

growstuff

Silverbrooks I've just read the report and confess I haven't a clue what the solution is.

It’s impossible to say whether the previous government were intending to do something about that paper (after all, means-testing had been in the 2017 Tory manifesto) but probably not. It was probably buried after Johnson’s election win the following month. Brexit, followed swiftly by Covid and then the cost of living crisis. The timing was never right.

All of the three reforms posited in that paper create their own set of complexities, and complexity cost money to resolve that can easily outweigh any potential savings. The cost of universality was static at just under 1.9 billion.

My view is that so long as WFP is spent in the economy, it doesn’t matter how. Richard Murphy again: Until it's appreciated that spending creates taxation and not that tax funds spending …

If I give my WFP to charity, those charities use the money to provide valuable services that the government would otherwise have to provide.

If I spend it on Christmas, those items will (probably) attract 20% VAT. At the same time, I am putting money into businesses which provide jobs. The government gets not only the 20% VAT but it also gets business taxes from the retailer plus income tax and NIC from workers. This enables them to contribute towards their own future pension and other benefits e.g. Maternity Allowance. In other words, the overall tax yield and the present and future benefits for others will be more if I spend WFP in the economy than if the government just tax it at source.

HMRC could, of course, claw it all back. A coding adjustment of £1000 would claw back £200 at 20% but then if someone has nSP of £11,973, they are then into negative personal allowances. That would need a K code - which can’t be applied if it would take more than half the occupational pension in tax. How would that work with people who have only a very small occupational pension? Trying to tax the WFP in-year could get very complicated for a lot of people leading to year-end tax arrears that can’t be coded out, because the K code can’t be applied, so has be to paid in a lump sum. The whole mess just drags on year after year for the sake of a paltry £200.

So what do we have, ten months on from the sudden cut?

Fewer than 46,000 additional households receiving Pension Credit out of the 760,000 families who were, according to the DWP and commentaators such as Martin Lewis, entitled to receive PC but did not claim it. That’s just 6%. What about other 94%?

www.gov.uk/government/statistics/income-related-benefits-estimates-of-take-up-financial-year-ending-2023/income-related-benefits-estimates-of-take-up-financial-year-ending-2023

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

Something is very wrong about all this.

I would like to be paying an average 3.00 a day for gas and electricity. We pay an average 8.50 a day over the year. DHs severe lung condition means we have to heat the house.

The same must apply to a lot of seniors.

HelterSkelter1

I would like to be paying an average 3.00 a day for gas and electricity. We pay an average 8.50 a day over the year. DHs severe lung condition means we have to heat the house.

The same must apply to a lot of seniors.

Yes but . . .

A lot of seniors can not only afford that, but can give their WFA away.

I feel for you HelterSkelter1, but while the argument above which I hear so often is still trotted out, and politicians or even people on GN support it, I’m afraid that’s just how it’s going to be.

I’m paying about the same now for fuel as I was five years ago. A spring/summer bill of £2 a day for gas and electricity and a winter bill of £5 a day for gas and electricity when the heating is on. In other words it costs just £3 a day to keep warm last winter, less than the price of a cup of coffee and the same as a single bus journey.
Silverbrooks that is anecdotal. You may live in one-bedroomed flat, many people do not.
Many older people may live in homes which are perhaps larger than their immediate needs but downsizing is not that easy in some areas. Their income might be small.

The WFA was not intended to cover the cost of fuel, it was a top-up payment to ensure that, when fuel costs soared, those people on fixed incomes who would be more likely to spend more time at home and be immobile would be able to heat their homes and cook hot meals. They'd then be less likely to have to go into hospital with cold-related illnesses.

Adding it to the SP means those wealthy pensioners who don't need it (who seem to be the majority of pensioners that some Gransnetters know!) means they will be paying back at least some of this in tax.

HelterSkelter1

I would like to be paying an average 3.00 a day for gas and electricity. We pay an average 8.50 a day over the year. DHs severe lung condition means we have to heat the house.

The same must apply to a lot of seniors.

Yes, DH has too, we try to be mobile but I wasn't either last winter either (worse now but I can sit in the sunshine).

I know it's anectodal but I am entitled to rebut the constant gripes that we are all being ripped off.

The fact that my energy bills are back to what they were five years ago says to me that I am not being ripped off.

What else is the same price as it was five years ago?

For the record, I live in a large, detached house. It has three reception rooms and four bedrooms. I heat it all.

I have a fixed income like most pensioners and am at home most of the day. My bill last year was £1,060.

I know the history of the winter fuel payment back to front. It was introduced with two levels. One rate for all pensioner households with an extra payment for people on Income Support. The benefits minister at the time, Harriet Harman was tasked with increasing the uptake of Income Support. It didn't work then as it has barely done now for Pension Credit.

But the goverment then didn't say, ^Right then, because people won't claim, we'll take it away from everyone and the poorest will be forced to claim residual welfare (which few appear to be doing) or left dangling on a cliff edge.

Instead they took the sensible step of increasing it for everyone. That way they provided a safety net for everyone.

I repeat. What's the point of taxing WFP (at say 20% which would cover most people) when spending it in the economy would result in a higher tax yield and benefit business, jobs and wider welfare?

I wish people would start thinking beyond who is more deserving and think about the benefits of universality. Residual welfare is Thatcherite thinking. I am sorry to see Labour going down this path.

For the record, I live in a large, detached house. It has three reception rooms and four bedrooms. I heat it all.

I have a fixed income like most pensioners and am at home most of the day. My bill last year was £1,060.

I am astonished- is that for gas and electricity or just for heating? How do you calculate the cost of just heating?

Our total fuel bill is around £2,400 and we have tried to be careful over the last winter. The heat is not on all day, certainly not at night.

Five years ago it was £1,650.

You're not an outlier Silverbrooks. My May usage for gas and electricity (17 days since my last bill) is £36.96, so it's just over £2 a day. The standing charge is about a third of the total.

My water/waste bill is less than £30 a month. I think £1 a day for providing clean water and disposing of my waste is a bargain.

I wish I could go back to our bills 5 + years ago to check what the standing charge and per kwh rate was exactly. I will see if I can google it later today. I am amazed that anyonr can heat and light a 4 bedroomed detached house for £1000 per annum. I must be doing something very wrong.
However that aside I .agree that the WFA should be included in the SP so that those who pay tax at basic and higher rates are contributing into the coffers. That would be the simplest way.
I also agree that water and sewage rates are not exorbitant. But not enough of what we do pay is invested back into infrastructure and future resilience and too much in dividends and bonuses. Water should be in public ownership. You can economise on heating, lighting, cups of coffee, hair cuts and lunches out. But we need to drink, cook, wash and flush.

It’s great that some of you feel you’re not being ‘ripped off’ by your energy company.

However, “Energy giants have pocketed over £420 billion in profits since the energy crisis started according to a new analysis of company reports”.

The vast majority of that £420 billion has gone directly to shareholders - largely foreign owned consortia, with little or no interest in the British consumer, both domestic and industrial. This is obscene, in a country where the poorest pensioners have to be given a WFA,

As per my earlier post, our energy costs are the highest in the developed world. They could and should be brought down, thereby allowing our manufacturing industries to thrive competitively, and no UK pensioner needing WFA in order to keep warm.

The source for my quote above is the End Fuel Poverty Coalition (forgot to add it).

LizzieDrip

HelterSkelter1

Monica Shame the water companies didnt invest their vast profits to ensure clean rivers and beaches. And future supply of clean water

Agreed👏👏👏

Also, shame the energy companies didn’t invest some of their vast profits into updating the grid and energy infrastructure, making them fit for the future.

Both water and energy are being used as cash cows by largely foreign investors who are simply reaping in our money for their shareholders.

IMO the government should put a percentage cap on the annual profit these companies are allowed to pass on to their shareholders, and they should have to invest a percentage of their income into updating infrastructure. If they fail to do this, the government steps in and takes them over.

May seem somewhat draconian but the stats for the cost of energy in the UK, for the consumer, compared to the rest of the developed world are staggering.

Our energy companies have been ripping us off for years - enough is enough!

Good idea LizzieDrip
I would go further and nationalise energy and water.

Lathyrus3

I suppose we could just raise the State pension to a level that covers a basic standard of living and doaway with pension credit, fuel allowance etc.

Anybody who wants more than a basic standard in retirement would know that extra pension will benefit them.

Last winter people were penalised for having a little extra pension because those who qualified for pension credit were so much better off than they were.

I agree with this.

There has to be a balance between ensuring that people don't do without and encouraging people to work and contribute financially to society (and thus provide for themselves in older age). If everything is means-tested this incentive is removed.

What is the point of saving into a pension (as well as paying NI for decades) when those who don't can be better off - it is a real slap in the face for many people who have lived frugally in order to have a comfortable retirement, and find that doing so has made them worse off than if they hadn't bothered.

I have heard people say that there is no point in their paying into an occupational pension as their pay is low, so all that would happen is that they would end up paying tax and be ineligible for benefits so they may as well have the money now. One of them is a single parent in her forties who works as a teacher. She knows the Teachers' Pension is a good one, but the contributions are high and when she adds up the allowances she would get on PC she feels it's just not worth it to pay in, as her standard of living would drop. I don't agree with her (largely as there is no guarantee that PC will even exist when she can retire) but I don't think that mentality is uncommon, and nor is resentment of people who get more for doing less.

This ties in with the government's intention to get more working age people off benefits. It's always been tricky to have a policy of being better off in work than not, and at the same time to ensure that those who can't work are not in poverty. If benefits are low, people suffer, and if they are higher the incentive to work is reduced.

The same is true of paying into additional pensions. Penalising people who 'don't need' something by not paying them what others get just drags them down, so more and more people are just above the 'needy' category, either because they get the benefits or because they are deemed not to need them.

Levels of neediness are never set by people living on anything like the margins of benefit thresholds. How they can possibly know what other people 'need' is a mystery to me.