U turn on winter fuel payments- is it a good move?

A lot of older people no longer work so have less money coming in yet have the same everyday needs as anyone else.
They often have various health issues, aren’t all very mobile and feel the cold more.
I think old people are a special case.

Oreo

Allira

Perhaps married couples shouldn't get the WFA!
After all -

The snow is snowing and the wind it is blowing
But I can weather the storm
What do I care how much it may storm
I've got my love to keep me warm

When poverty comes in the door, love flies out of the window🤔or is it the other way round? Something my Nan used to say years ago.

Anyway Allira sounds like a might fine song to me, I can hear it in my head now😁

An ear worm, Oreo!

What I would have done.

Reinstate for everyone this year then forget the faffing over splitting it as a household payment and clawback as proposed.

From April 2026, add the weekly equivalent of the WFP to the State Pension for everybody.

If you are pension age and under 80 then you get £200 at £3.85 a week.

If you are 80 then you get £300 at £5.77 per week

There are about 13 million pensioners of whom about 3 million are 80 or older.

About 9 million pay income tax. About a million pay at 40% or 45%, the rest at 20%.

The net annual cost would be just be over £2 billion, about the same as it costs to pay universal WFP.

The WFP hasn’t risen from £200 since the year 2000 (other that the extra £100 for older pensioners which was added in 2003). If it had rised with inflation, £200 would be nearer £400 now.

The equivalent pension rise would now be index linked although not triple locked, just as additional state pension is not triple locked. But the cost of the rise is offset by taxation.

Some might complain that at a once tax free payment has become taxable but you would be getting it earlier than previously and index linked rises will eventually even this out plus two person households would be receiving more. There night need to be some tweaks to be fair to single householders.

The government could in theory round up the extra pension to say £4.00 pw and £6 pw to compensate for this.

Key. By paying this as extra pension it would now be paid out of the National Insurance Fund. This has a current credit surplus of £86 billion around £60 billion more than needs to be held in here as a surplus. The surplus is invested and generated almost £4 billion in interest in 2023/24.

The GAO say the fund surplus is expected to rise each year for the foreseeable future and so it will continue to earn interest more than enough to pay this as additional pension.

DWP save money as they no longer have to send out annual letters to people telling them they will receive the WFP. No more expensive computer runs to pay the WFP as a lump sum. No expensive admin for HMRC to clawback WFP from those with incomes over £35,000.

The whole thing is simplified.

Moreover, most people on grid spread their annual energy costs evenly over 12 months. The energy companies more or less force up to do this now. We now have the extra money on a weekly basis to put towards Direct Debits. Those who are offgrid now have money in advance to put toward buying oil at cheaper summer prices.

Nor perfect but a decent compromise. It won't happen of course.

If some inter-generational warrior wants to fight me over a taxable weekly pension rise that’s less than the price of the cup of coffee, I’m ready.

From April 2026, add the weekly equivalent of the WFP to the State Pension for everybody.

Well, that's far too simple and sensible Silverbrooks! 😃

Of course, once combined with the State Pension, it can't be taken away. However, any pensioner who pays income tax would be paying slightly more so it would, in fact, probably be cost-effective.

If some inter-generational warrior wants to fight me over a taxable weekly pension rise that’s less than the price of the cup of coffee, I’m ready.
👏👏👏

The gloves are off now! 🥊

That surplus in the National Insurance Fund really bugs me as it need only be about £25 billion.

NIF’s only purpose is to pay out SP and other contributory benefits like maternity and bereavement benefits. 95% paid out is SP.

www.gov.uk/government/publications/national-insurance-fund-accounts/great-britain-national-insurance-fund-account-for-the-year-ended-31-march-2024

£2 billion from an £86 billion surplus is peanuts.

The idea came to me partly of the unfairness to people who are off grid who could buy in more oil at cheaper summer prices if they received the WFP earlier. There was a suggestion backalong to pay WFP earlier to those off grid but it was rejected as too costly to adminster.

Oreo

A lot of older people no longer work so have less money coming in yet have the same everyday needs as anyone else.
They often have various health issues, aren’t all very mobile and feel the cold more.
I think old people are a special case.

Many old people have paid off their mortgages, so don't have the same outgoings as many working age people. They don't have children to feed and clothe either. It's not true that they all have the same or higher outgoings.

Not only that, but not all "old" people are frail and immobile. Yes, I accept some are and they should be getting Attendance Allowance. Apparently, I'm old now I'm 70 and I get a bit fed up of the stock photos of "old people" with hunched backs and paper thin skin counting out their pennies.

Maybe I should give up on GN because I really am getting tired of the moaning and whinging, criticism of "young people" and seeing old people as a special case. It's just as divisive as the IF.

Not being able to afford the basics of life - food, clothes, housing - doesn't just affect one age group. It can affect everybody. Yes, older people deserve a pension (and like Silverbrook I think the WFA should be integrated into the SP and taxed) but the squabbling about thresholds and who should get what is petty.

growstuff

Doodledog I can't remember when the option to pay a married woman's "stamp" was phased out, but I don't think many women under 70 are affected. I'm also not sure when a married woman's tax affairs were separated from her husband's but I know that I have always paid my own income tax. That meant for a time that we didn't receive the married couple's supplement (or whatever it was called) but I'm fairly sure that was phased out.

Yes it was phased out, but not until about 1990, I think. Here it is:
Before 1990, the income of a married couple was added together for tax purposes and treated as if it were the income of the husband. A married man had a personal allowance, which was just over one and half times the single person’s allowance. A married woman who was at work had her own allowance – Wife’s Earned Income Allowance (WEIA) – which was the same as the single person’s allowance, but all the allowances including the WEIA were in law given against the husband’s income which included his wife’s income. The system had its roots in the social legal concepts of the early nineteenth century.

www.taxandthefamily.org/history-article

Many old people have paid off their mortgages, so don't have the same outgoings as many working age people. They don't have children to feed and clothe either. It's not true that they all have the same or higher outgoings.

True but many of us have been there, done that.

If my parents had been given a Winter Fuel Allowance I would have thought that was a brilliant idea. I would certainly not have felt resentful after they'd worked hard all their lives and deserved some comfort in their old age.
Certainly income tax was higher and mortgage rates were high but did we feel resentful of our parents who may have paid off their mortgages and were managing on their limited pensions too? Certainly not.

I agree that young people should get help too - I think CB should be universal, for instance. I would also like to see more free childcare, and am pleased about the rise to the minimum wage.

It shouldn’t be a race to the bottom. I’m not bothered about the WFA personally- it will make little difference to me- but I will not start telling other people what they ‘need’, as I have no idea of others’ circumstances, and object to that as a way of allocating public money. It drags everyone down.

Doodledog

I agree that young people should get help too - I think CB should be universal, for instance. I would also like to see more free childcare, and am pleased about the rise to the minimum wage.

It shouldn’t be a race to the bottom. I’m not bothered about the WFA personally- it will make little difference to me- but I will not start telling other people what they ‘need’, as I have no idea of others’ circumstances, and object to that as a way of allocating public money. It drags everyone down.

The Government can find/create any money it needs.

I was only thinking of this in relation to the WFA - I didn’t mention married, although I know RSALLAN2002 did. If two people live in the same house the house only needs to be heated once, whoever they are. I’m not saying I agree that it should happen, but there is opportunity for a future government to only pay one person per household.

You seem to be under a misapprehension, Casdon. The WFA is a household allowance and it made no difference if you were married or not. I received the full £200 until my then, long term, partner, to whom I was not then married, reached pensionable age. We then received £100 each.

Being legally 'single' made no difference. We didn't get a whole £200 each.

I don’t think my post suggests otherwise?

Allira

Doodledog

I agree that young people should get help too - I think CB should be universal, for instance. I would also like to see more free childcare, and am pleased about the rise to the minimum wage.

It shouldn’t be a race to the bottom. I’m not bothered about the WFA personally- it will make little difference to me- but I will not start telling other people what they ‘need’, as I have no idea of others’ circumstances, and object to that as a way of allocating public money. It drags everyone down.

The Government can find/create any money it needs.

Quite right, Allira. It certainly can create any money it likes and all this posturing about there not being enough money is just perpetuating an untruth.

Oh good, I was hoping you might be along to explain it better than me!!

So, our fuel bills took a huge hike, and that meant the govt got masses more income from fuel tax, so they could afford to give us back a little of what we actually paid in.
Now fuel bills have gone down again a) we can better afford them and b) to govt is getting less tax from us, so they cannot afford to give us back so much.
While I will not mind the money - who does - I am not for getting it at the expense of the national budget or those who really need it.
The warm home discounts are funded from the green levy that is a % of energy income, so it will have to be found somehow.

growstuff the squabbling about thresholds and who should get what is petty

Arguing over such a piddly amount is petty. WFP had become little more than a token when one thinks of it in weekly or even daily terms - 55p a day because, after all, we use fuel every day. As I have said repeatedly, 55p would buy 2 kWh of electricity a day, enough to switch on the oven for 30 minutes to warm up a pie.

At one extreme there is an argument to be made that no pensioner should need it as no pensioner should have an income of less than £227.10 a week - the single rate for Pension Credit. Over than and you would have been shut out of WFP until this change but you could have claimed Housing Benefit (if you rent) and Council Tax Benefit.

Is 55p a day or £3.85 a week going to make that much difference? But we come back to the fact that an estimated 700,000 households are still not claiming Pension Credit so they are living on less than £227.10 pw.

This has all been about them, a stick to get people to claim PC. And they haven’t. How do we solve that? £1.5 billion in PC going unclaimed each year.

At the other extreme, the biggest issue for younger people is the cost of housing. Untiil we tackle that through building more social housing, putting the brakes on buy to let, introduce rent control, bring the one million empty homes back into regular use and all the other inequities in the system, of course they are going to feel aggrieved.

You can buy a one bedromed apartment here for about £150,000 (not shared ownership or retirement.) Put that amount of cash in the bank and you would earn about £7,000 a year in interest say about £600 pwr month. Instead, buy that flat and rent it out and you can charge £1,200 per month in rent and you prevent a FTB from buying it. That’s sheer greed to me. As soon as the developers have finished a new apartment block, the outside is plastered with To Let signs. I have lost count of the number of people I meet who are now engaged in this racket. Former council houses now owned by private landlords rented out for three or four times social rent. It makes my blood boil.

You can buy a one bedromed apartment here for about £150,000 (not shared ownership or retirement.) Put that amount of cash in the bank and you would earn about £7,000 a year in interest say about £600 pwr month. Instead, buy that flat and rent it out and you can charge £1,200 per month in rent and you prevent a FTB from buying it. That’s sheer greed to me. As soon as the developers have finished a new apartment block, the outside is plastered with To Let signs. I have lost count of the number of people I meet who are now engaged in this racket. Former council houses now owned by private landlords rented out for three or four times social rent. It makes my blood boil

Well said Silverbrooks👏👏👏

MaizieD

Allira

Doodledog

I agree that young people should get help too - I think CB should be universal, for instance. I would also like to see more free childcare, and am pleased about the rise to the minimum wage.

It shouldn’t be a race to the bottom. I’m not bothered about the WFA personally- it will make little difference to me- but I will not start telling other people what they ‘need’, as I have no idea of others’ circumstances, and object to that as a way of allocating public money. It drags everyone down.

The Government can find/create any money it needs.

Quite right, Allira. It certainly can create any money it likes and all this posturing about there not being enough money is just perpetuating an untruth.

What you see as a truth is the foolishness of extremes to others - think Liz Truss.

Yes, the government can, should they be foolish enough to do so, print as much money money as they want. Printing more money without supporting economic growth or productivity can cause inflation, reduce the currency's value, and create economic instability. Most governments have recognised that responsible monetary policy aims to balance money supply with economic output to maintain stable prices.

Martin Lewis is warning that there are already scams out there asking people to apply. You do NOT need to. Please make your own elders aware. www.facebook.com/ThisMorning/videos/691191247222473

Can someone please explain why what I said above suggests that I am saying something that contradicts MMT? I didn’t have economics in mind at all.

Doodledog

growstuff

Doodledog I can't remember when the option to pay a married woman's "stamp" was phased out, but I don't think many women under 70 are affected. I'm also not sure when a married woman's tax affairs were separated from her husband's but I know that I have always paid my own income tax. That meant for a time that we didn't receive the married couple's supplement (or whatever it was called) but I'm fairly sure that was phased out.

Yes it was phased out, but not until about 1990, I think. Here it is:
Before 1990, the income of a married couple was added together for tax purposes and treated as if it were the income of the husband. A married man had a personal allowance, which was just over one and half times the single person’s allowance. A married woman who was at work had her own allowance – Wife’s Earned Income Allowance (WEIA) – which was the same as the single person’s allowance, but all the allowances including the WEIA were in law given against the husband’s income which included his wife’s income. The system had its roots in the social legal concepts of the early nineteenth century.

www.taxandthefamily.org/history-article

I got married in 1986, but we were never taxed as a couple. We opted to be taxed separately. My husband did not receive a married man's personal allowance. If we had not opted to be taxed separately, our combined income would have pushed us into a higher tax bracket.

So, yes, it was possible to be taxed as a couple, but it was also possible to opt out of the system. Any couple in the same situation as my husband and I would have been stupid not to opt out. It was very easy to tick the right boxes on a form. My income was never counted as part of my husband's income.

You are absolutely right. My late DH and I also elected to be taxed separately before 1990.

In 1971 an election for separate taxation of a wife's earnings was introduced. Couples could elect to have their earned income assessed separately for tax, and a wife's earned income was taxed as if she were a single person.

This election had to be made jointly, and any unearned income enjoyed by a wife continued to be aggregated with her husband's when assessed for tax.

Although the wife claimed her own single person’s allowance, neither spouse could claim either of the married allowances.

Election for separate assessment was only attractive for couples with relatively high incomes, where the wife had significant earned income.

Couples only benefited if the saving they made in higher rate tax, from the disaggregation of the wife's earned income, outweighed the loss of personal allowances (the gap between the single and married allowances).

By 1989-90 spouses had to have a joint income of £30,511, of which the wife's earned income had to be at least £7,026, before the election would be beneficial

Silverbrooks Thank you for confirming that I'm not suffering from some kind of false memory syndrome - or lying. Neither my DH or I had any unearned income, so that wouldn't have affected us.

I honestly can’t remember- we married in 1980, so well within the timescale. I’d be very surprised if I willingly handed over my salary or tax allowance, but I knew about the allowance before I looked it up. I’ll ask my husband if he remembers.

We have only ever had PAYE, and no accountants or similar advising about minimising tax, so will probably have just done whatever was usual (ie not opted in or out of anything). And we were in our early 20s then, so early career and not high earners either.

Anyway what we did or didn’t do isn’t the point, which is that marriage was (or could be) a factor in how people were taxed and how much NI they paid. Now it isn’t, so it makes sense to treat people as individuals rather than households, IMO.