The Government’s decision to reinstate winter fuel payments for millions of pensioners has been welcomed, but commentators said there are lessons to learn from the U-turn.
Nine million pensioners will receive the payments this winter as pensioners in England and Wales with an income of £35,000 or less per year benefit.
The payments were previously linked to pension credit, with the Government arguing this would help to balance a “black hole” in public finances.
Jon Greer, head of retirement policy at wealth manager Quilter, said: “While restricting payments to those on pension credit may have appeared fiscally responsible, it underestimated both the administrative burden and the strength of feeling such changes provoke among pensioners.”
He added: “The lesson here is that if Government wants to better target support, it must do so with careful planning, adequate resourcing and a clear communication strategy.
“It also throws into sharp relief the growing tension around the state pension triple lock (which is used to increase the state pension).
“There is a strong case to say the triple lock is no longer fit for purpose, yet this episode has shown just how radioactive any attempt at reform has become.”
SNP Westminster leader Stephen Flynn MP said: “This screeching u-turn was inevitable and lessons must be learnt from the damaging mess the Labour Government caused by robbing pensioners of their winter fuel payments.”
In a video posted on X, consumer champion Martin Lewis said: “Do I think this is an improvement? Spoiler, yes, very much so.”
He added that the previous threshold set last winter was “just far too low and left many people on still very low incomes earning just above the threshold missing out”.
He said moving it to £35,000 “which is much more equivalent to average income is a big improvement and should lead to three in four state pensioners getting a payment, according to the Government numbers. So yes, that’s worthwhile.”
Mr Lewis said that pension credit had long been under-claimed, “so linking winter fuel payments to pension credit was in my view flawed.
“And even now, there are 700,000 eligible state pensioners on very low incomes who should be getting pension credit who don’t, which also means they miss out on winter fuel payment.
“Well that’s gone, because now every state pensioner household will get this by default unless they choose to opt out of it, which means those vulnerable households who are least likely to act will automatically get it.”
Mr Lewis said the move means: “Far more pensioners who were struggling with still high energy bills will get this payment.
“I feel relieved, that’s my instant reaction to the news.”
Unison general secretary Christina McAnea said: “This is the right thing to do. The Government acknowledges it made a mistake.
“Restoring the fuel payment to all but the wealthiest pensioners will make a huge difference to anyone who struggled to keep warm last winter.”
Sarah Coles, head of personal finance, Hargreaves Lansdown, said: “The partial u-turn on the winter fuel payment will make a huge difference to the finances of some of the lowest-earning pensioners, who had missed out by a hair’s breadth by earning fractionally too much to qualify for pension credit.”
Independent Age chief executive Joanna Elson said: “Our helpline receives thousands of calls from older people making drastic cutbacks just to get by and the changes to the winter fuel payment made this worse.
“For millions living on low incomes, the entitlement supports them to turn their heating on and stock up on food during the colder months.”
Caroline Abrahams, charity director at Age UK, said: “At Age UK we heard from many through the winter who were so frightened about their bills that they didn’t even try to keep their homes adequately warm.”
Chancellor Rachel Reeves said the Government had “listened to people’s concerns” about the decision to limit the payment last winter.
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