Winter fuel payments again……

Winter fuel payments are in the news yet again. I have lost count of the number of reports and media articles I have read about why these should be reformed and how the money could be better used to cut the deficit or transform our failing system of care or solve some other crisis.  And please don’t tell me again that millionaires don’t need a winter fuel payment or a bus pass. Of course not – but let’s make policy changes based on the position of majority of older people not the small minority who are very rich. (when the Deputy Prime Minister pointed out last year that Alan Sugar didn’t need a bus pass Lord Sugar tweeted  in no uncertain terms that he doesn’t have one!).

Winter radiator - Photo: HarlanH via Flickr

Photo: HarlanH (Creative Commons)

So should we be looking at restricting universal payments to the less well off? It has been suggested that they should just go to people receiving Pension Credit. However that would mean that up to 1.6 million of the poorest older people would miss out because they are not claiming the Pension Credit they are entitled to. The big advantage of universal payments is that they reach everyone including those do not take up means-tested benefits. They also provide some extra help to the ‘not rich but not poor’ group who can feel because they made sacrifices during their working lives they miss out on benefits and are penalised for having saved.

An alternative option suggested by an article in the Times (9 January) is that the money is consolidated into the state pension so that the better off would pay tax on it. In some ways this makes sense and would simplify the system but it would penalise many people on low incomes receiving Pension Credit. As the state pension is taken into account for means-tested benefits they could end up with a higher state pension only to lose the same amount of Pension Credit. And taxing the Winter Fuel Payment is only likely to save around £230 million – that is before any additional administrative costs.

So overall it is easy to criticise universal support such as the winter fuel payment but hard  to reform or limit it without increasing complexity or risking some of those most in need missing out. Now if you were starting to design a system from scratch you wouldn’t have a range of different payments and concessions – some means-tested, others based on age 80, 75, 65, 60, or as in the case of winter fuel payments (linked to women’s state pension age) somewhere in between.

Instead you would probably have a simple state pension that meets essential living costs without the need for means-tested top ups, opportunities to save into decent private pensions throughout our working lives, not to mention a programme to ensure all our homes are well insulated and energy efficient with energy bills affordable for all.

Maybe we will get there one day, but we have a long way to go. And with a cold spell on the way the annual payment of £200 or £300 remains a very welcome boost in income for many older people that helps reduce worries about meeting the rising cost of energy bills.

Find out more about Age UK’s Spread the Warmth campaign and why we need to protect the health of older people in winter at www.spreadthewarmth.org.uk

Read more about money matters on the Age UK website

8 responses to “Winter fuel payments again……

  1. Not so much the winter fuel allowance but the bus pass really has not been thought out. The very rich would not be seen dead on a bus when the cars are in the garage and do not subscribe. The cost of administration, if it were not to actually increase the cost of the free bus pass, would have to come out of the monies currently spent on free bus passes which would mean that the definition of ‘well of people’ would have to be pitched very low. With these people no longer able to use the free bus passes then bus usage would fall of dramatically. This would have the knock on effect that fares for the rest of the passengers would have to rise significantly plus bus timetables or even complete bus routes would be cut. With much dearer bus fares and reduced routes, people would be further restricted in their ability to get to work and the downward spiral would continue. And all this is before one looks at the quality of life of the aged.

  2. I am fairly sure that the Winter Fuel payment was introduced as a recompense for the imposition/increase of VAT on fuel bills. The payment was to benefit older people, who seem to have a greater tendency to vote and badger their MP’s. Look to those who imposed the VAT charge and those who wish to take it away? Simples!

  3. HMRC systems are really not sophisticated enough to work out whether a pensioner should be entitled to the Winter Fuel allowance. The additional admin costs would outweigh any benefit to the Exchequer

  4. winter fuel payments cut what next bus passes abolished then the elderley will crawl in the corner and die if they carnt get extra money for large bill and carnt get to the town

  5. It’s simply not fair that certain sections of society have cuts and restrictions imposed whilst others do not. It’s not a case of ‘us versus ‘them’ in terms of the older and younger generations, simply a case of identifying an equitable distribution of the cuts and reductions. You can talk all you want about vulnerable members of society (and if a child isn’t a vulnerable member of society then what is?) but children and young people have taken a significant hit in terms of this ‘we’re all in it together approach’ whilst other sections of society haven’t. From my perspective it’s clear that, whilst pensioners may have contributed throughout their working life, they obviously didn’t contribute enough to sustain the broad framework of benefits that this country now provides, and that certain elements of society seem to think is their divine and sacrosanct right to claim at the expense of others.

    • Ah John, how little you know of old people. It is either knowing nothing of old people or a knowledge of a limited cross section of the, how shall I say, well off. Should all take a cut now in the firm belief that it is temporary and that better times will return. Sadly, if better times do return then the bulk of the old people will not be here to see it.
      Does John sleep in a wholly hat, socks and at least 3 layers of clothes under a mountain of blankets because the cold really gets into the bones past a certain age and the heating cost are so very expensive ? – probably not.
      Is John a young person who could possibly walk a couple of miles with a rucksack of shopping on his back or is John someone who can afford his own car or is John someone who could afford a taxi ? John is probably not someone who can just about drag a shopping trolley to the bus stop outside the supermarket and get on a bus without paying a couple of pounds which they have not got because truth be told they can not walk that far even without the shopping ?
      And before you say means testing so the cuts only affects the better off, this will not mean rich people only to be affected, this will mean all above and probably a lot below the poverty line.
      And if this is young people have taken a hit so all should then this is the argument that I have fallen on the ice so I am going to trip you up to make me feel better.

    • To John
      I have never claimed anything in my life and neither has any of my family. My sons grew up and got good jobs and when they were young they were vulnerable and as long as they had food in their belly and were happy and yes we struggled as there was no benefits that your generation get now. I had a job at 11 and left school at 15 with no qualifications but have never been out of work. I retired at 72 only due to ill health or i would still be working now as i have my pride. Now i live on £128 per week and still pay my bills. Most people who claim are either lazy or contributed nothing and send money out of my country to theirs

  6. Yes it is the thin end of the wedge if the principal of universal benefits is conceded.As was stated it is those at the very margins who would suffer not the rich.

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