Winter fuel payment

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).

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)

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.

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

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

AGAA4

The threshold needs to be raised by more than it normally would annually.

Governments have to accept both need of some pensioners and the acceptability to the current tax payers, who are funding the current State Pension. It is already being raised above other areas, by use of the triple lock.

Much of the conversion on this topic is over simplistic - especially in the MSN. It doesn't help us understand the problem or how it can be resolved.

Don't take umbrige so quickly ferry23. I wasn't suggesting that you did expect the government would pay you after death.

What I was pointing out was that government need to make schemes work for the tax payer. After all, we all know by now that the the proportion of our NI tax allocated to pension payments didn't go to pay our pensions, it went to paying the previous generations. Our state pensions are paid by the tranche who are current earning through work. The government has to take their taxation into account too and must set up a system that can continue.

The threshold needs to be raised by more than it normally would annually.

Lathyrus3

Would raising the threshold at which pensions begin to pay tax work?

It was so unfair that those who had contributed to a pension, not only paid tax on it but also lost the fuel allowance.

Pensions are just another form of income. If raising the base level for paying tax on income is seen as the right thing to - and there will be points of argument for and against - it will automatically affect those who income comes wholly or partially from pensions.

All citizens are, or should be, equal when it comes to paying tax.

PoliticsNerd

I don't mean to be unkind ferry23, but "forever". Really?

Obviously someone has done the maths and it costs the less to do it this way.

My forever, obviously.

I can assure you that I'm not stupid enough to think they pay me when I'm dead.

merlotgran

Just raise the threshold.

Simples!

This already happens annually. How would you suggest it is raised diffently?

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 WW.

I hope the government won’t go down the road of complete reversal of the policy - I don’t think they’ll be that daft!

Perhaps raise the threshold but, of course, there will still be people just above any new threshold. Will they be disgruntled - and so it goes on🤷‍♀️

My hope is that more don't have to worry about heating their homes next winter.

Whatever good things this Goverment achieves, it will always be remembered for this PR catastrophe.

I hope they reinstate this a universal payment to all state pensioners. It was never mandatory to spend it on fuel.

researchbriefings.files.parliament.uk/documents/SN06019/SN06019.pdf

The Winter Fuel Payment is paid as a cash lump sum and recipients are not obliged to spend it on fuel bills. … the Energy and Climate Change Committee argued that it would be “more intellectually honest” to rename the benefit and to concede that it was merely a general income supplement.

As a means of tackling fuel poverty, the case for Winter Fuel Payments is weak. Its payment is unfocused and not targeted on people in or near fuel poverty. However, as a universal means of supplementing pensioner incomes, which is easily understood and easy to pay, the political case for the retention of Winter Fuel Payments is strong. However, it would be more intellectually honest to rename the benefit; concede that it a general income supplement; and stop accounting for it as a fuel poverty measure.

There’s a good economic argument for saying it’s better not to spent the payment on fuel but to spent it on other things where the government gets a bigger tax yield.

Were someone to spent £200 on 25 bottles of Christmas wine at £8.00 a bottle, the Government would receive £100 in VAT and excise duty plus business taxes on the retailer’s mark up.

Most other spending attracts VAT at 20%.

To quote Richard Murphy: Until it's appreciated that spending creates taxation and not that tax funds spending, nothing else about how the government works makes sense.

There’s evidence too that plenty of people donated the WFP to Christmas charity appeals. Were these services not being provided by charities: support for homelessness, cancer support, mental health support, medical research, humanitarian aid, emergency services, animal welfare etc, the Government would be obliged to pay for them.

The Social Fund Winter Fuel Payment (Amendment) Regulations 2024 says:

A full impact assessment has not been produced for this instrument as no, or no significant, impact on the private, public or voluntary sectors is foreseen.

Really? Whose crystal ball was that?

This decision was always made without the proper assessment and scrutiny and that’s the reason it should be reversed now.

Means testing is very expensive and very divisive. If a new cut off were to be applied, there will still be people on the cliff edge who will feel aggrieved.

Another vote for raising the threshold 👍

Would raising the threshold at which pensions begin to pay tax work?

It was so unfair that those who had contributed to a pension, not only paid tax on it but also lost the fuel allowance.

merlotgran

Just raise the threshold.

Simples!

Yes, that seems obvious to me. It was the right decision but the threshold was set way too low.

My recollection of many (not all, but large number) of posts in GN was that means testing was proper but the cut off point was too low, and this as a LP member has been my view all along and emails to MP etc.

So I hope they do review it, the problems is however how to find a straightforward way to do it without causing so much bureaucracy its self defeating.

merlotgran

Just raise the threshold.

Simples!

I think this is what is being discussed. We may know as early as next month.

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 do have savings which take me over the threshold. But, each month I'm having to drawer on those savings to pay my energy bill. So my savings will dwindle and then I'll have to claim Pension Credit - indefinitely. So instead of paying me a small amount every year as fuel allowance, the government will pay me significantly more for ever.

ferry23 regardless of how low your savings dwindle in the future you may not be eligible for pension credit. Recipients of full new state pension don’t qualify for pension credit. My sole income is my state pension and I’m not eligible for pension credit as I receive the full amount of pension. Pension credit is a top up to raise the income to new state pension level.

Just raise the threshold.

Simples!

I don't mean to be unkind ferry23, but "forever". Really?

Obviously someone has done the maths and it costs the less to do it this way.

It's a benefit. It was universal for pensioners but attached to means tested benefits for others. Now it is attached to means tested benefits in the same way for pensioners as it is for others on low incomes.

I wonder what suggestions those who complain would have to turn this into a logical system?

As with all "benefits" there's never going to be a one size fits all solution.

My only income is a state pension. However, I do have savings which take me over the threshold. But, each month I'm having to drawer on those savings to pay my energy bill. So my savings will dwindle and then I'll have to claim Pension Credit - indefinitely. So instead of paying me a small amount every year as fuel allowance, the government will pay me significantly more for ever.