The Government has issued an update on its Winter Fuel Payment policy.
MPs voted this week to change the eligibility criteria for the previously universal payments of £200 or £300 for those of state pension age.
Under the new rules, only those on certain means-tested benefits will get the payments, such as Pension Credit claimants.
Conservative MP Mel Stride asked the Government what estimate the DWP has made of the “potential impact” of narrowing the criteria and particularly the cost savings it will involve.
In reply, pensions minister Emma Reynolds shared figures suggesting the Goverment would save around £1.4billion in 2024/25 and £1.5 billion in 2025/26, based on an assumption of a 5 percent increase of Pension Credit take-up.
She also pointed to a future date when the figures would be firmed up. She explained: “Winter Fuel Payments are classified as Annual Managed Expenditure (AME).
“The estimated savings are sensitive to forecasted take-up of Pension Credit. The final savings will be certified and published by the Office for Budget Responsibility at the Autumn Budget on October 30, taking account of any behavioural response.”
In another question about the Winter Fuel Payment policy, Labour MP Neil Duncan-Jordan asked if the Government would provide an estimate of the financial savings from the payment no longer applying to higher and additional rate pensioners.
Treasury minister, Darren Jones, said in response that the Government “does not publish estimates” on this particular cost saving.
He went on to explain the reasoning behind tightening the criteria. He stated: “In the face of the substantial pressures faced by the public finances this year and next, the Government has had to make hard choices to bring the public finances back under control, including targeting Winter Fuel Payments.
“Winter Fuel Payments will continue to be paid to pensioner households with someone receiving Pension Credit or certain other income-related benefits.
“This means that the Winter Fuel Payment will be better targeted to low-income pensioners who need it.”
Financial journalist Martin Lewis previously criticised the policy change opining that the eligibility were “being squeezed to too narrow a group” with the changes.
He said there is also the problem of low take-up of Pension Credit, warning: “Part of the problem with winter fuel payments is the chronic underclaiming of Pension Credit, a key benefit that now triggers entitlement.
“It’s thought 880,000 due it won’t get it, and they’re the poorest pensioners. I doubt the awareness-raising campaign can have much impact on that (I and others have been shouting about it until we’re blue in the face, for years).
“It needs proactive one-on-one contacting of likely candidates, eg.. those not getting full state pensions. Yet even that is hard because there are so many scams targeting the elderly how do you ensure people trust that it is legit?”
