In a surprising move, Labour leader Sir Keir Starmer has announced plans to ease cuts to winter fuel payments for pensioners, allowing more individuals to qualify again. The policy change is expected to be implemented at the autumn Budget.
The winter fuel payment is a lump sum of £200 a year for households with a pensioner under 80, or £300 for households with a pensioner over 80. It was previously paid in November or December to all pensioners, but ‘10.3 million lost out last year after the government restricted eligibility to those who qualify for pension credit and other income-related benefits.’
Pressure to change course has grown in recent weeks, with some Labour MPs and councillors blaming the policy for the party’s losses at last month’s local elections in parts of England. Former Labour prime minister Gordon Brown said Sir Keir was ‘right’ to reconsider, stating that ‘no pensioner should be forced into poverty, if they have served the country all their lives.’
Pensioners, also known as retirees, are individuals who have reached the age of retirement and are receiving a pension or other forms of income.
According to the World Health Organization (WHO), the global population aged 60 years and older is projected to increase from 1 billion in 2015 to 2.1 billion by 2050.
This demographic shift has significant implications for healthcare, social security, and economic systems worldwide.
Sir Keir announced plans to ease cuts to winter fuel payments, allowing ‘more pensioners’ to qualify again. However, it remains unclear how many will regain their entitlement for the payments, or when the changes will take effect. The policy change is expected to be implemented at the autumn Budget.
Designing a new income threshold for winter fuel payments presents political and practical headaches for ministers ahead of the Budget in the autumn. Possible options include linking it to lower council tax bands, expanding eligibility to those receiving housing or disability benefits, or creating a new dedicated means test. The Resolution Foundation has cautioned that creating a new dedicated means test would be the most straightforward option but warned that expanding pension credit by 10% would cost £2.5bn.
The change in approach has been welcomed by some, including Liberal Democrat leader Sir Ed Davey, who called for the cuts to be reversed ‘in full.’ Age UK, one of the charities opposing the cuts, welcomed the change but emphasized that any new system should ensure pensioners on low and modest incomes can continue to receive the payments.
The prime minister’s spokesman declined to guarantee when the changes would take effect, stating that they will be delivered as quickly as possible. However, ministers have emphasized that they will only make decisions when it is clear where the money will come from, how it will be paid for, and whether it is affordable.
Winter fuel payments were introduced in 1997 as a way to guarantee pensioners would be able to heat their homes during colder months. The main state pension gained additional protection under the ‘triple lock’ policy, which ensures pensions go up each year by the highest of inflation, average earnings, or 2.5%.
