21 May 2025
If you are covering the news that the government is reviewing eligibility criteria for the winter fuel payment, please see the following comment from Jon Greer, head of retirement policy at Quilter:
Keir Starmer’s indication that the government may revisit the eligibility criteria for the winter fuel payment today at Prime Minister's Questions marks a notable shift in tone, and it’s one that reflects the political sensitivity of recent changes. The original decision to restrict the payment to pensioners receiving pension credit may have saved the Treasury money, but it has created confusion and left many vulnerable people behind.
While a full reversal seems unlikely, there is speculation that the income threshold could be raised from £11,500. That would allow more pensioners to qualify while retaining some element of means-testing.
However, if pension credit is no longer used as the mechanism, the government will need to establish a new system to determine eligibility. It must be simple, effective, and avoid excluding those in genuine need through red tape or lack of awareness.
The link to pension credit did at least have the benefit of raising awareness of the support available. Since the start of the year, there has been a sharp uptick in applications for the benefit. Close to 300,000 applications were made between April and December last year but over half were rejected. This highlights both the appetite for support and also that many people that feel they need the support are unable to get it.
Our research with 5,000 UK retirees shows that pensioners are increasingly concerned about the potential reduction or withdrawal of further benefits, such as bus passes and free prescriptions. More than a third (35%) of those we surveyed expressed worry over this issue. Therefore, going some way to reinstate winter fuel may build trust and help mitigate some political fallout.
The exact cost of this adjustment would depend on the new threshold set and the number of additional claimants, but the government first projected that the changes to the winter fuel payment would save £1.4 billion in 2024/25, rising to £1.5 billion in 2025/26. Taking what would be a relatively small hit to government coffers relative to the total tax receipts, may be viewed as a necessary step to address the concerns of older people.
