Winter fuel payments back but not for millionaires, says minister

Times

2 days ago

Winter fuel payments will be restored this winter, but wealthier pensioners will not get them, ministers have said.
Rachel Reeves, the chancellor, promised that 'more people will get winter fuel payments', and said details would be set out soon.
She said there would still be a 'means test' but pledged to introduce it in time for this winter, despite concern that ageing government computer systems would struggle to adapt thresholds in time.
Torsten Bell, the pensions minister, ruled out restoring universal payments to all pensioners. 'Most people — 95 per cent of people — agree that it's not a good idea that we have a system paying a few hundred pounds to millionaires. And so we're not going to be continuing with that,' he told the work and pensions committee.
'Is there any prospect of a universal winter fuel payment? The answer is no.'
In one of her first acts in office, Reeves stripped winter fuel payments from all but the poorest pensioners to save £1.5 billion. But the move proved so politically toxic that Sir Keir Starmer announced a U-turn last month, without giving details of how many of the ten million pensioners who lost payments would have them restored.
Reeves said that the economy was now 'in a better shape' than when she scrapped payments last year, adding in a speech in Rochdale: 'We have also listened to the concerns that people had about the level of the means test, and so we will be making changes to that.'
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Ministers had previously suggested changes to ageing computer systems may not be in place in time for this winter. But Reeves promised that new rules 'will be in place so that pensioners are paid this coming winter, and we will announce the detail of that and the level of that as soon as we possibly can'. She added: 'People should be in no doubt that the means test will increase and more people will get winter fuel payment this winter.'
Bell suggested that millions of higher-income pensioners would not have their payments restored. 'We are committed to the principle that there should be some means testing — that those on the highest income should not be receiving winter fuel payments,' he said.
'My priority is those on lower incomes who have missed out … All of us would have heard from people on lower incomes who did not receive a winter fuel payment this year.'
At present, payments are restricted to those claiming pension credit, which is given to pensioners with income below £11,500 for a single person or £18,000 for a couple. Bell said ministers were 'looking at all of the policy options for how eligibility can be extended', including taxing payments.
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He dismissed calls to raise the pension credit threshold, however, saying it would be 'very expensive' and would not lead to many people getting winter fuel payments restored. 'If the objective was for more people to receive the winter fuel payment, you cannot achieve it via that mechanism, because you would only get a very small increase in the pension credit threshold for any given level of spending,' he said.
He also suggested that a tapered threshold, where payments are gradually withdrawn, was not a preferred option for payments of £200-£300 a year, saying they were 'more bureaucratic' to apply.
'Tapers involve more information being held by the state, they involve more complexity,' he said.
'We obviously do need to think about the requirements to administer that, the costs of doing so relative to the benefits.'
Other options include widening eligibility to pensioners claiming housing benefit or disability benefit. The Resolution Foundation, where Bell was previously chief executive, has estimated this would cost £300 million a year and restore payments to 1.3 million pensioners.
However, Bell downplayed the importance of winter fuel payments in protecting pensioners, dismissing claims that withdrawing them had led to more dying of cold. 'We saw negative excess deaths, so fewer deaths than normal [last winter],' he said.
He said tackling long waits for NHS treatment and poorly insulated homes were far better ways of helping pensioners who suffered because they were unable to afford heating.
'The biggest letdown of older generations in Britain is the state of our health service,' he said. 'We're not going to solve all of that within the social security system. We've got to deal with that in the health and care system more broadly.'
As Ed Miliband, the energy secretary, battles the Treasury to mitigate cuts to his £6.6 billion warm home plans, Bell said a 2013 cut to insulation was 'among the bigger mistakes' of the past 20 years and meant 'a lot of people are living in homes that are not high-enough quality'.