In July 2024 the UK Government announced that entitlement to the Winter Fuel Payment would be restricted to those in receipt of Pension Credit and other means-tested benefits, with the change taking effect from winter 2024/251. The Scottish Government's periodic report on fuel poverty records the announcement and states that it reduced the Block-Grant Adjustment by £147 million in 2024-251.
The report sets the decision in the context of rising fuel poverty in Scotland. The 2023 Scottish House Condition Survey estimated that 34 per cent of households in Scotland were in fuel poverty, up from 31 per cent in 2022 and 24.6 per cent in 2019, even as the share of dwellings rated EPC band C or better rose from 45 per cent in 2019 to 56 per cent in 20231. The report states that high fuel prices have been the largest factor influencing fuel poverty rates in recent years1.
The Scottish Government responded with additional support. In November 2024 it announced £41 million in additional support for people struggling with energy costs in winter 2024/20251. In the same month the Acting Minister for Climate Action established a social tariff working group bringing together stakeholders, including suppliers and third sector organisations, to co-design a social tariff policy; its final report was shared with the UK Government in March 20251. The report describes the group's recommendation as targeted support in the form of a discount on energy bills, applied automatically and proportionate to need1.
"in July 2024, the UK Government announced its decision to restrict entitlement to Winter Fuel Payment to those in receipt of Pension Credit and other means-tested benefits from this winter"
The report also records wider scheme activity in the period. The Home Energy Scotland Grant and Loan Scheme was launched in December 2022 as an update to the HES Loan and Cashback scheme, and was re-launched in October 2023 with £85 million allocated in financial year 2024/25, described as the scheme's highest budget to date1. The ECO4 scheme was launched in March 2022, and in October 2023 the UK Government expanded the current ECO scheme to include the Great British Insulation Scheme1. As of February 2025, around 46,887 households had received improvements, with 2,723 Scottish households having benefited from the GBIS scheme, 6 per cent of those participating1.
| Measure | Detail as reported |
|---|---|
| Winter Fuel Payment change announced | July 2024, entitlement restricted to Pension Credit and other means-tested benefits1 |
| Block-Grant Adjustment reduction, 2024-25 | £147 million1 |
| Scottish Government additional winter support | £41 million, announced November 20241 |
| Home Energy Scotland Grant and Loan Scheme budget, 2024/25 | £85 million1 |
| Households in fuel poverty, Scotland, 2023 | 34 per cent, up from 31 per cent in 20221 |
Why it matters for households
For pensioner households that previously received the Winter Fuel Payment automatically, the change means the payment now depends on being in receipt of Pension Credit or another qualifying means-tested benefit, so who qualifies is no longer a matter of age alone. Households that fall outside those benefits lose a fixed contribution towards winter bills at a time when the report records fuel poverty rising and energy prices still above pre-pandemic levels1. The report notes that the payment sits alongside other support, including the Warm Home Discount, and that the Scottish Government's own schemes direct funding at energy efficiency improvements rather than bill support1. For a home's energy independence, the practical effect is a shift in emphasis: bill support has narrowed, while grant-funded insulation and heating measures, which reduce consumption over time, continue under ECO4 and related schemes1. The report states that energy markets remain reserved to the UK Government, and that the Scottish Government continues to seek a social tariff mechanism1.
What happens next
The social tariff working group's final report and recommendations were sent to the UK Government in March 20251. The Scottish Government's response to its consultation on EPC reform, published 21 January 2025, confirmed plans to lay new regulations later in 2025 and bring them into force in 20261. The report also notes that the Scottish Fuel Poverty Advisory Panel's upcoming statutory report will consider progress over the past three years1. No date has been reported for a UK Government decision on Winter Fuel Payment entitlement beyond the change already announced1.