Unite, one of Labour’s biggest donors, is taking legal action against the government in response to its decision to axe the Winter Fuel Payment for millions of pensioners this year. The union has made a formal application to the High Court for leave to go forward with a full judicial review.
The union claims the government acted unlawfully and that the policy will result in a higher number of cold-related deaths this winter. It previously wrote to work and pensions secretary Liz Kendall calling for the cut to be reversed, but says it was met with an “unsatisfactory response”.
The government’s decision to cut the payment was announced in July this year, shortly after Labour’s election win. From this winter, pensioners will only receive the Winter Fuel Payment if they qualify for Pension Credit or another means-tested benefit.
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The number of pensioners who receive the allowance will plummet from 11.4 million to 1.5 million as a result, according to figures from charity Age UK.
The loss of the payment coincides with energy prices surging 10% from the start of October. They are set to rise by a further 1.2% in January, following the latest Ofgem price cap announcement last week.
“Labour’s decision to pick the pocket of pensioners was wrong on every level,” says Unite general secretary Sharon Graham. “The government has been given every opportunity to reverse its decision and it has failed to do so.”
Graham called the policy “rushed” and “ill thought out”, adding that the government “failed to follow the proper legal measures” before moving forward. “With winter approaching, the courts must now hold the government to account and reverse this cruel cut as quickly as possible,” she says.
Chancellor Rachel Reeves has previously defended the decision to cut the payment, saying it was necessary in light of overspending from the previous government. Critics counter that the policy is unfair, and that pensioners who just miss out on Pension Credit are far from wealthy, meaning they rely on the fuel allowance to get them through the colder months.
Research from data and analytics company Policy in Practice suggests an estimated 130,000 pensioners miss out on Pension Credit because they are just £500 over the annual income threshold, or £9.62 per week. This means they would potentially be better off if they had a lower income but qualified for Pension Credit and the Winter Fuel Payment.
Universal winter fuel allowance will be reintroduced for Scottish pensioners in 2025
In a separate development this afternoon, the Scottish government has announced that a universal payment will be reintroduced for Scottish pensioners in 2025.
Those on qualifying benefits like Pension Credit will receive £200 or £300, depending on their age, while wealthier pensioners will receive £100.
Scottish pensioners will still have to go without their payment in 2024 unless they qualify under means testing. However, alongside the new universal payment, social justice secretary Shirley-Anne Somerville also announced a £41 million package of support for people struggling with energy costs this winter.
£20 million of the funding will go to the Scottish Welfare Fund, allowing councils to provide support to people in crisis this winter. A further £20 million will be invested in the Warmer Homes Scotland Scheme to help people boost the energy efficiency of their homes. The Scottish government says this will help households save around £300 per year in energy bills.
The remaining £1 million will be given to registered social landlords and partners to help sustain tenancies and prevent homelessness.
“We will not abandon older people this winter or any winter. We will do our best to make sure no-one has to make a decision between heating and eating, and we will continue to protect pensioners,” Somerville said.
How does the Winter Fuel Payment work?
The Winter Fuel Payment is an annual tax-free benefit worth up to £300. You could be eligible once you hit state pension age. The payment starts at £200, but is upped to £300 for over-80s. It is paid on a household basis, so two pensioners living together only receive one payment.
From this year, retirees only qualify for the payment if they receive Pension Credit. Pension Credit is a separate benefit worth around £3,900 a year, on average. It tops up your state pension if you are on a low income, boosting single pensioners to £218.15 per week, and couples to £332.95.
Pension Credit can also unlock a range of other pensioner perks, including a free TV license, help with NHS costs, and the Warm Home Discount (a one-off £150 discount on your energy bill).
Despite this, one of the problems with Pension Credit is that it is widely misunderstood and underclaimed. An estimated 880,000 households are entitled to the benefit but haven’t applied, according to figures released over the summer.
The government has seen some success following an awareness campaign, with Pension Credit claims up 145% over the past 16 weeks – though more than half of the claims that have been processed so far for this period were rejected, suggesting an ongoing lack of understanding.
If you think you could be eligible for Pension Credit, you should apply by 21 December, otherwise you will miss out on the Winter Fuel Payment this year. We share details on how to apply in our Pension Credit explainer.
“Those who are eligible would not only benefit by regaining the Winter Fuel Payment, worth either £200 or £300 depending on age, but they would also receive Pension Credit to top up their income,” says Rosie Hooper, chartered financial planner at Quilter Cheviot.
“If you are unsure about your eligibility, an online pension credit calculator can provide an estimate of potential benefits. Applying is simple and can be done online, by printing and completing a paper form, or by calling 0800 99 1234,” she adds.
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