Withdrawal of the univeral winter fuel payment was an open goal that happened to present itself at the time.
Had Sunak called the election a little later, this couldn’t have happened in the way that it did. As it was, the new government had to rush through secondary legislation while Parliament was in recess to make it law. As it result there was no no impact assessment and no formal scrutiny by the Social Security Advisory Committee (SSAC).
As a social experiment to get more households to claim Pension Credit, it has largely failed. The number of households now in receipt of PC has increased by fewer than 50,000 compared to before the change. As 780,000 household were said be eligible and not claiming, that’s clear proof that the barriers to claiming remain. It’s often the most vulnerable who don’t claim.
If I were the Minister, that’s how I would justify the reversal. We tried to increase PC uptake. It didn't work very well. It’s better to reinstate the safety net.
This is essentially what happened in 1997/98 when the payment was first introduced by Gordon Brown.
There were two rates, £20 for all households but £50 for those in receipt of Income Support. It was hoped then that many more households would claim IS to get the extra £30. They didn’t, so the payment was first increased to £100 in 1999 for all households, then increased to £200 in 2000. The extra £100 when someone in the household is 80 was introduced in 2003.
See page 9:
researchbriefings.files.parliament.uk/documents/SN06019/SN06019.pdf
The payment hasn’t kept up with inflation. Had it done so £200 would be nearer £400 now.
Savings have come from the women affected by SP equalisation who had to wait up to six more years to receive the payment.
In real terms, the cost of paying univerally has remaned static. See page 5 of the linked document.
Payment is per household. In a household receiving £200 where both are pension age so receiving a £100 each, only the person whose income is more than £35,000 will have the £100 clawed back through the tax system.
Martin Lewis explains:
www.moneysavingexpert.com/news/2025/06/winter-fuel-payment-criteria-confirmed/
He explains how this differs from the clawback of Child Benefit was high earners - which suggests there night be some change to that.
There will be an option to opt out of receiving the payment.
As I’ve said repeatedly, and it's in the paper, it was never mandatory to spend the payment on fuel. In fact it’s far better in terms of Treasury yield if people spent it on something else. Spend it on fuel - tax yield 5%. Spend it on Christmas wine - tax yield over 50%. Most other things in between - tax yield 20%. Public spending creates taxation.
As most people on-grid spread their annual energy costs evenly over 12 months now, are effectively forced to through the direct debit system, in reality, most people are physically spending the payment on something to do with Christmas. Once it's in someone's bank account who can say what it's spent on anyway?
