The Winter Fuel Payment will be axed for all but the poorest pensioners, after opposition MPs failed to block the government’s plans in a House of Commons vote today (10 September). A total of 348 MPs voted in support of the government’s plans, while 228 MPs backed the opposition motion.
We do not yet know how many Labour MPs abstained from the vote, but a significant number were expected to take this route rather than support the government’s cut. It comes after seven Labour MPs had the whip suspended when they rebelled against the party over the two-child benefit cap earlier this year.
The vote came after days of mounting pressure from unions and Labour party members. Charity Age UK says the decision means “as many as two million pensioners who badly need the money to stay warm this winter will not receive it”.
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Plans to cut the Winter Fuel Allowance were first announced by chancellor Rachel Reeves in July, when she delivered her spending audit and revealed a £22 billion shortfall in the public finances. It means that, going forward, pensioners will only qualify for the benefit if they receive Pension Credit or another means-tested benefit.
Critics of the government’s decision have pointed out that Pension Credit often goes unclaimed, as many pensioners aren’t aware they qualify for the benefit and will miss out on much-needed energy support as a result.
What’s more, thousands of pensioners who just miss out on Pension Credit could fall off a financial cliff-edge when the Winter Fuel Payment is removed.
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.
The government has emphasised that this was not a decision it wanted to make, but Starmer told the BBC’s Laura Kuenssberg this weekend that he was “going to have to be unpopular” in order to “fix the foundations” of the UK economy. The cut is expected to save the government around £1.4 billion a year.
In the past, Labour has criticised previous governments that have looked at changing the rules around the Winter Fuel Payment. In 2017, the party suggested 3,850 elderly people could die as a result of a similar pledge made in Theresa May’s election manifesto.
What is the Winter Fuel Payment?
The Winter Fuel Payment is an annual tax-free allowance worth up to £300. It aims to help pensioners pay their energy bills during the coldest months of the year, when many fear the consequences of turning the thermostat up.
Pensioners have been eligible for some support on energy bills since 1997, but under Labour’s new rules, the support will be means-tested. Households will be eligible for up to £200 if they receive Pension Credit, or £300 if they receive Pension Credit and have a household member aged 80 plus.
What is Pension Credit and are you eligible?
Pension Credit is one of the most under-claimed and misunderstood benefits, worth £3,900 a year on average. The benefit essentially tops up your state pension if you are on a low income.
Pension Credit will top you up to £218.15 per week if you are single, or £332.95 if you are a couple. If your income is higher, the government says you might still be eligible depending on your circumstances, for example if you have a disability or you care for someone.
The Department for Work and Pensions (DWP) recently launched an awareness campaign to increase the number of people claiming Pension Credit. The good news is that the number of claims has doubled since Labour’s announcement, up from 17,900 (five-week period before the announcement) to 38,500 (five-week period after the announcement).
Rachel Vahey, head of public policy at AJ Bell, says: “This shows the UK’s pensioners are acting fast. Previous government estimates suggest just six in 10 people who are eligible for Pension Credit make an application, potentially costing those on the lowest incomes thousands of pounds in lost income.”
She adds that “those rushing to fill in the forms will be wanting to keep a hold of the £300 Winter Fuel Payment, but could also access other valuable benefits, including dental treatment and free TV licenses.”
You should try to get your Pension Credit claim in as quickly as possible, as the qualifying week in 2024 for Winter Fuel Payments is from 16 to 22 September. You can apply for Pension Credit on the government website, by phone or by post.
If you don't manage to claim before this date, the DWP can backdate your claim. The last date for making a backdated claim for Pension Credit is 21 December.
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