In July 2024 the Government announced that Winter Fuel Payments will, from this winter, be paid only to the 1.5 million pensioner families in receipt of Pension Credit or an equivalent means-tested benefit1. The change forms part of an effort to reduce what the Government has quantified as a £22 billion gap in the public finances1.
The payments have been made to almost all pensioner households every winter since their introduction in 1997, and are currently worth £200 or £300 depending on age and family composition1. Up to 7 million families will lose the payment this winter, saving the Government £1.3 billion, rising to £1.5 billion in subsequent years in current prices1.
"In July, the Government announced that Winter Fuel Payments (WFPs) will from this winter be paid only to the 1.5 million pensioner families in receipt of Pension Credit (PC) or an equivalent means-tested benefit"
The Resolution Foundation estimates that around one million pensioner families among the poorest fifth of UK households will lose the money, either because they are entitled to Pension Credit but do not claim it, or because they sit just above the entitlement threshold, sometimes because of the adjustment the calculation makes for savings and other assets1. The most recent official estimates put Pension Credit take-up at around 63 per cent, with around 37 per cent, or 800,000 eligible families, missing out1. The Government has promised an active Pension Credit take-up campaign, but the Foundation says that even if this works as the Government expects, boosting take-up by 5 percentage points, it would mean about 100,000 additional families keeping the payment this winter1.
The Foundation sets out the scale of the group affected against the Government's take-up expectations:
| Measure | Figure |
|---|---|
| Pensioner families receiving Pension Credit or equivalent | 1.5 million |
| Families expected to lose the payment this winter | Up to 7 million |
| Saving this winter | £1.3 billion |
| Saving in subsequent years | £1.5 billion |
| Poorest-fifth pensioner families estimated to lose the payment | Around 1 million |
| Eligible families not claiming Pension Credit | Around 800,000 |
| Additional families keeping the payment if take-up rises 5 percentage points | About 100,000 |
The Foundation also notes that the energy price cap remains significantly higher than pre-crisis levels, at an annualised £1,717 for an average household in Q4 2024, compared with £1,277 in Q1 2022, in nominal terms1. It adds that pensioner households are not average households on energy use: they are likely to spend more time at home, households headed by those aged 65-plus are more likely to live in a home with an Energy Performance Certificate rating of D or worse than younger age groups, and elderly people are more likely to be physically vulnerable to the cold1.
Why it matters for households
For pensioner households that relied on the payment, the change removes a fixed sum worth £200 or £300 from winter budgets at a time when the price cap, though below its 2022 peak, remains well above pre-crisis levels1. Whether a household keeps the payment now turns on receipt of a means-tested benefit rather than age alone, so who qualifies for the Winter Fuel Payment has narrowed sharply. The Foundation's estimate that around one million of the poorest pensioner families lose the money, including many entitled to Pension Credit but not claiming it, indicates that the payment's reach and the reach of the benefit it now depends on are not the same thing1. For a home's energy independence, the practical effect is that a guaranteed universal contribution towards winter bills has become a conditional one, tied to a claim that a substantial minority of eligible households do not make1.
The Foundation also records that non-pensioners are now almost twice as likely as pensioners to be living in fuel stress, defined as needing to spend more than 10 per cent of after-housing-costs income on energy to maintain an adequate standard of warmth, with couples with children more than twice as likely as pensioner households (56 per cent versus 24 per cent) and lone parents more than three times as likely1. It notes that the Warm Home Discount enables greater support to be channelled to poorer benefit-receiving families but does little to help those who have lost the Winter Fuel Payment, and that a substantial expansion of Cold Weather Payments is, in its view, perhaps the most promising avenue because it can target proxies for income and energy need1.
What happens next
The restriction applies from this winter1. The Government has promised an active Pension Credit take-up campaign1. The Foundation states that the Government is giving no sign that it could backtrack on its basic decision, and that it pointed to the recently extended Household Support Fund as a potential source of relief, though the Foundation judges that fund unlikely to protect most of those losing the payment1. It also sets out options it says could restore payments to further groups: extending them to Housing Benefit recipients, which it estimates would bring in a further 360,000 families at a cost of around £100 million this year, and to all pensioner households in receipt of a disability benefit, which it estimates would cost an additional £200 million this winter and benefit a further 900,000 families1. No decision on those options has been reported.
Sources1 cited
- Cold comfort • Resolution Foundation, resolutionfoundation.org