Tag: Winter Fuel Payment

Pensioners face surge in winter energy bills

The Chancellor’s decision to cancel the Winter Fuel Payment for most pensioners will leave millions of older households facing an inflation-busting energy bills increase this winter.

A combination of the end of the Winter Fuel Payment and a likely increase in energy prices from 1 October will mean that the average older household will see their energy bills increase by up to 15% in real terms, compared with winter 2023/24. [1]

Charities have written to Rachel Reeves MP this week to set out the challenge faced by pensioners and ask the Government to reconsider its plans.

The letter, signed by over 50 organisations, says:

“The decision to remove the Payment to all but a small minority of pensioners will see millions more older people face the prospect of spending this winter in cold damp homes.

“This has the potential to create a public health emergency. The impact of living in cold damp homes is particularly harsh on those older people with a disability, a long term health condition or with poor mental health.

“It results in these people turning to an NHS that is already under stress and in some cases, can result in additional winter deaths.”

Simon Francis, coordinator of the End Fuel Poverty Coalition, commented:

“We have publicly commended the Government in taking some of the long term measures to tackle high energy bills, such as the drive for more renewable energy and a Warm Homes Plan. But these solutions will take time to bring down bills.

“In the meantime, households of all ages will need more support from the Government to stay warm this winter, not less.

“We urge the Chancellor to rapidly consult with consumer groups to broaden the targeting of the Winter Fuel Payment, to introduce support to end energy debt, expand the Warm Home Discount and extend the Household Support Fund.”

The letter ends by warning ministers that:

“Unless we see urgent action from the Government to keep people warm this winter, one of the first actions of the new Government will be to condemn more vulnerable households to fuel poverty.”

Members of the public have also been asked to write to their MPs through the Warm This Winter campaign or the Independent Age website urging the Government to think again. Hundreds of thousands of people have also signed petitions on the Age UK and 38 Degrees websites. [2]

National Pensioners Convention General Secretary Jan Shortt commented:
“I seriously believe the Chancellor has underestimated the harm her decision will cause to older people still struggling with energy costs and facing higher rates in October.  It is absolutely shocking that the new Labour government should treat older, vulnerable people in this manner.  The triple lock alone will not enable them to keep up with energy bills.”

Jonathan Bean from Fuel Poverty Action added:

“Making heating even more unaffordable for those trying to survive on basic pensions is a cruel and reckless move that will cause widespread suffering, and increased NHS admissions this winter. Instead we need an energy pricing system that guarantees everyone the essential energy they need to stay warm and safe.”

Jacky Peacock from Fairer Housing said:

“While it makes sense to withdraw the payment for wealthy pensioners, the bar has been set too low.  We’re asking the Chancellor to re-think this move to allow pensioners on modest incomes to enjoy their home in comfort this winter without the worry of how they will be able to afford it.”

Jenna Fansa from Hackney Foodbank commented:

“We urge the government to widen the eligibility criteria for Winter Fuel Payments. Last year we saw a 95% increase in the number of older people coming to our food bank due in part to rising food and fuel costs. For many, it’s a choice between having the heating on or going hungry. Restricting the criteria only to those on certain benefits will cause more anxiety for many pensioners and will inevitably bring more pressures for food banks like ours.”

Morgan Vine, Head of Policy and Influencing at Independent Age, said: 

“It is not an overstatement to warn that, in its current form, this sudden change puts lives at risk. Pension Credit has an unacceptably low take-up at just 63%. 

“This means up to a staggering 1.2 million older people who are eligible could be missing out on money they need to turn their heating on. On top of this, every day we hear from older people who just miss out on Pension Credit but still struggle to pay their energy bills. They could now be heading into winter without this important lifeline. 

“We urge the Chancellor to not make this change now, and instead ensure every older person has an adequate income to avoid financial hardship before removing the Winter Fuel Payment.”

Ken Butler, Welfare Rights and Policy Officer at Disability Rights UK said:

 “The removal of winter fuel payment from millions of pensioners, many of them Disabled people, is shameful. Many pensioners live on the margins of poverty and need more heat and energy to manage their health conditions and charge their health-related equipment.

“In addition, due to a DWP backlog assessing pension credit claims, award decisions are taking several months to be made. Because of this, many eligible pensioners could miss out on fuel payments this winter.”

ENDS

For a full copy of the letter visit: https://www.endfuelpoverty.org.uk/letter-to-the-chancellor/

[1] Average energy bills in winter 2023/24 were GBP1,834 – but for households receiving the full GBP300 Winter Fuel Payment this would have been GBP1,534.

Average energy bills for winter 2024/25 are forecast to be GBP1,762 according to analysts Columbia Threadneedle (accessed 22 July 2024). This means the average household who received the full Winter Fuel Payment in 2023/24 will now pay 14.68% more for energy in winter 2024/25.

[2] Age UK petition stands at over 138,000 and the 38 Degrees petition stands at over 105,000 as at 1500 on 2 August 2024

Charities condemn Chancellor’s Winter Fuel Payment decision

Charities have lined up to condemn the new Chancellor’s decision to restrict the Winter Fuel Payment (WFP) to a smaller group of older households.

Age UK estimate that more than 800,000 older people living on very low incomes – under £218.25 a week for single pensioners and under £332.95 for couples –  who are already missing out of the Pension Credit, will now lose the WFP that helps them to pay their fuel bills.

In addition, the charity estimates that there are also about a million pensioners whose weekly incomes are less than £50 above the poverty line, who will also be hit hard by the loss of the Payment.

Finally, older people whose incomes are a little higher, but who live in energy inefficient homes and/or who are seriously unwell and need to keep the thermostat turned up high in order to protect their health will also suffer.

This equates to around 2m pensioners forced into fuel poverty. In addition, Warm This Winter data suggests that another 2.9m pensioners will now face financial difficulty this winter due to the decision. [1]

Caroline Abrahams, charity director at Age UK said:

“We strongly oppose the means-testing of Winter Fuel Payment (WFP) because our initial estimate is that as many as two million pensioners who badly need the money to stay warm this winter will not receive it and will be in trouble as a result – yet at the other end of the spectrum well-off older people will scarcely notice the difference – a social injustice.

“It is well established that pensioners tend to do everything possible to avoid going into debt so if they are worried about their future energy bills we know their likely response will be to ration their fuel use and economise by reducing their spending on other essentials. This proposed policy change is therefore certain to result in more older people experiencing a horrible ‘eating or heating’ dilemma.

“Means-testing WFP this winter, with virtually no notice and no compensatory measures to protect poor and vulnerable pensioners, is the wrong policy decision, and one that will potentially jeopardise their health as well as their finances – the last thing they or the NHS needs. With winter now just over the horizon, the Government should halt their proposed change to WFP and think again, given the clear evidence of how it will hurt the older people who need it the most.”

National Pensioners Convention General Secretary Jan Shortt said:
“This is devastating news for millions of older people whose income is literally just a few pounds above the threshold to receive pension credit.

“These people are already barely able to make ends meet – this move effectively wipes out any benefit they receive from the triple lock increase on the state pension.

“I seriously believe the Chancellor has underestimated the harm her decision will cause to older people still struggling with energy costs and facing higher rates in October.  It is absolutely shocking that the new Labour government should treat older, vulnerable people in this manner.  The triple lock alone will not enable them to keep up with energy bills.”

Matt Copeland from National Energy Action commented:

“Today the Chancellor announced that the Winter Fuel Payment will only be given to pensioners receiving benefits going forward. Although this would make the policy more progressive, it will leave many pensioners who need support, without it. One third of fuel poor households do not receive benefits. They should not be forgotten.

“Energy prices remain high and are due to increase again this winter. This creates a significant challenge for low income households. Any funds raised from this policy change should go towards helping low income and vulnerable energy customers this winter as a priority.”

A spokesperson for the End Fuel Poverty Coalition added:

“When Rishi Sunak threatened to axe Winter Fuel Payments in September 2023 we said that this could be a death sentence for pensioners who are only just about managing to keep out of fuel poverty.

“Nothing has changed.

“Energy prices are still high, people are still struggling with the cost of living and this dangerous decision by the Chancellor could condemn pensioners to living in cold damp homes this winter.

“Figures for the Warm This Winter campaign suggest that almost half of over 75s could now see their winter heating budget torn to shreds as they have modest incomes and will not now be eligible for the payment.

“The Chancellor must urgently think again and consult with older people’s charities on a better way to target this support to a wider group of pensioners.”

Jonathan Bean from Fuel Poverty Action, said:

“Making heating even more unaffordable for those trying to survive on basic pensions is a cruel and reckless move that will cause widespread suffering, and increased NHS admissions this winter. Instead we need an energy pricing system that guarantees everyone the essential energy they need to stay warm and safe.”

A spokesperson for Independent Age commented:

“Today’s decision to end the Winter Fuel Payment for those not receiving Pension Credit risks driving hundreds of thousands of older people into further financial hardship. We welcome the Chancellor’s intention to tackle the low uptake of Pension Credit, however means testing the Winter Fuel Payment now will mean too many older people will fall through the cracks and not get the vital financial support they desperately need, especially when household bills like energy are still extremely high.

“Pension Credit has an unacceptably low uptake at just 63%. This means a staggering 880,000 older people who are eligible could be missing out on money they need to turn their heating on. On top of this, every day we hear from older people who just miss out on Pension Credit but still struggle to pay their energy bills. They could now be heading into winter without this important lifeline.

“We understand the UK Government needs to make some tough choices, but today’s announcement demonstrates just how important it is for all older people facing financial hardship to receive the money they are entitled to. We also hope the new UK Government will take this opportunity to work cross party to determine what an adequate income in older age is and ensure that everybody receives it so that nobody lives in poverty in later life.”

ENDS

[1] 2m based on Age UK calculations. 2.9m based on Opinium data for Warm This Winter (December 2023) and based on the number of pensioners with an income of GBP20-30k a year combined with population estimates from the ONS.