July 30th 2024.
According to money saving expert Martin Lewis, the recent announcement about changes to the Winter Fuel Payments could potentially lead to older people facing financial struggles. The Chancellor, Rachel Reeves, has stated that the payments will no longer be universal for all pensioners but instead will only be available for those on benefits such as Pension Credit. This means that the number of eligible pensioners will be reduced from 11.4 million to only 1.5 million, resulting in a projected savings of £1.4 billion for the current financial year.
Mr. Lewis has expressed his concerns about the policy, stating that while there may be arguments for ending the universality of the payments due to tight national finances, the group that will now receive them is too narrow. He highlights that many pensioners rely on the £100 to £300 Winter Fuel Payments to help them keep their heating on during the cold winter months.
In fact, with the winter approaching and the Energy Price Cap expected to rise by 10%, energy bills are likely to almost double for most households. This will make it even more difficult for pensioners to afford to keep their homes warm. Mr. Lewis believes that the targeting of Winter Fuel Payments is too narrow, and he has shared a formal statement to this effect with the Chancellor.
The statement highlights that pensioners were already due to receive less this winter, as this is the first time since 2022 that they will not receive the additional top-up of up to £300 for winter fuel costs. Mr. Lewis urges the government to consider a similar approach to the emergency energy crisis measures announced in April 2022, where a payment was made to households in council tax bands A to D. This would provide assistance to a wider group of lower to middle-income pensioners and help mitigate the impact of high energy bills.
Furthermore, Mr. Lewis emphasizes the importance of ensuring that the 800,000 people eligible for Pension Credit but not receiving it are informed, educated, and helped through the process. He believes that the government has a moral obligation to reach every corner and proactively contact eligible individuals. Pension Credit is a crucial gateway benefit, and with the link to the Winter Fuel Payment, it becomes even more important to ensure that fewer people miss out.
Ms. Reeves has stated that the decision to change the Winter Fuel Payments was made due to a significant funding shortfall of £22 billion. This has resulted in major cuts to infrastructure projects, including the cancellation of a tunnel under Stonehenge. However, she has also promised pay rises for public sector workers.
Morgan Vine, head of policy at Independent Age, has expressed concern about the potential impact of these changes. He believes that the loss of Winter Fuel Payment could push hundreds of thousands of older people into further financial hardship. While he welcomes the government's efforts to address the low uptake of Pension Credit, he believes that means-testing the Winter Fuel Payment will result in many older people falling through the cracks and not receiving the vital financial support they need.
In fact, it is estimated that only 63% of eligible individuals are currently claiming Pension Credit, meaning that around 880,000 older people are missing out on much-needed financial assistance. This is a concerning statistic, especially with the rising cost of household bills such as energy. Mr. Vine shares that they often hear from older people who just miss out on Pension Credit but still struggle to pay their energy bills. With the recent changes, they may now face the winter without this lifeline.
It is worth noting that the Winter Fuel Payment is a devolved matter in Scotland and Northern Ireland. However, the concerns raised by Martin Lewis and others still apply in these regions, and it is essential for the government to address these issues and ensure that all eligible individuals receive the assistance they need.
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