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Wales Online
a day ago
- Business
- Wales Online
Winter fuel payment: Options to reintroduce the benefit for millions of households
Winter fuel payment: Options to reintroduce the benefit for millions of households The decision to make the Winter Fuel Payment available only to those who claim pension credit last year meant those claiming the benefit fell by almost 90% and saved around £1.5 billion a year, the Institute for Fiscal Studies (IFS) estimates An update on Winter Fuel Payments is likely within the next few weeks (Image: undefined via Getty Images ) Plans on whether to restore Winter Fuel Payments for more pensioners could be unveiled as early as next month, Angela Rayner recently hinted. The Deputy Prime Minister said an update may be likely in the Spending Review, scheduled for June 11. In a highly controversial move the Labour UK Government previously limited the annual payment of up to £300 to only those receiving certain means-tested benefits, such as Pension Credit or Universal Credit. It was in an effort to address a £22 billion 'black hole' in the public purse. However, with the UK's economic prospects improving, Sir Keir Starmer expressed his desire to reinstate the payments to "more pensioners" at the next "fiscal event". Below we have outlined a number of possible outcomes that could be announced on June 11 to help you know what to expect. These include anything from a full reversal to expanding entitlement to recipients of certain benefits. For money-saving tips, sign up to our Money newsletter here . Full reversal One option on the table could be to completely overturn the move that removed the benefit from countless pensioners Taking back the decision to restrict it to only those who are eligible for pension credit the previous year resulted in a nearly 90% drop in those claiming Winter Fuel Payment and led to an annual saving of roughly £1.5 billion, according to the estimations by the Institute for Fiscal Studies (IFS). Reinstating the policy change from last year would extend eligibility to an additional 11 million households and naturally erase the £1.5 billion in savings. Introduce a designated threshold for Winter Fuel Payments Introducing a bespoke threshold and means-testing system would offer an avenue for households that don't qualify for Pension Credit to request Winter Fuel Payments. Lifting the bar 20% higher than the Pension Credit limit would bring about an expenditure of nearly £100 million and make payments accessible to about 400,000 extra families, as per the data from the Resolution Foundation. An alternative approach could take inspiration from Child Benefit by letting all pensioner households apply, but then necessitating those with income above a specific tier to reimburse some amount through a self-assessment tax return, notes the IFS. However, Tom Waters, associate director at the IFS, has flagged concerns regarding the adoption of "a clunky bureaucratic mechanism for what is, ultimately, a relatively small payment". The Institute for Fiscal Studies (IFS) has estimated that restricting Winter Fuel Payment to only those on pension credit last year led to a nearly 90 per cent drop in claimants, saving about £1.5 billion annually. Reversing the policy change from last year would make an additional 11 million households eligible, effectively erasing the £1.5 billion saved. Introduce a specific income threshold for Winter Fuel Payments Implementing a new income threshold and means test could enable households not receiving Pension Credit to qualify for Winter Fuel Payments. An increase of 20 per cent above the Pension Credit limit could incur a cost of approximately £100 million, extending benefits to roughly 400,000 more families, as per the Resolution Foundation's analysis. One approach could mirror Child Benefit, allowing all pensioner households to claim, but then requiring higher-income recipients to repay some through a self-assessment tax return, as noted by the IFS. However, IFS associate director Tom Waters cautions against the potential pitfalls of "a clunky bureaucratic mechanism for what is, ultimately, a relatively small payment". Widen eligibility to include recipients of disability or housing benefits Expanding eligibility to include those receiving disability benefits could benefit around 1.8 million additional households, with an estimated annual cost of £500 million, according to the IFS. Expanding the Winter Fuel Payment to cover those receiving housing and disability benefits could benefit an additional 1.3 million pensioner households, with an annual cost of £300 million, according to the Resolution Foundation's calculations. Ruth Curtice, the chief executive, described this move as an "affordable" and "sensible way forward". Pay Winter Fuel Payments to individuals, not households Currently, the Winter Fuel Payment is issued per household rather than per individual, which presents a challenge in its distribution. A shift to individual allocation would enable the UK Government to perform means testing on a personal level, utilising existing income tax data. Article continues below This change would allow low-income pensioners with wealthier partners to receive the winter fuel payment. However, this adjustment might result in couples receiving double the amount compared to single individuals, whereas currently, a single person receives the same as a couple in one household.
ITV News
2 days ago
- Business
- ITV News
Starmer: Farage's ‘fantasy' economics will lead to Liz Truss-style meltdown
Nigel Farage's 'fantasy' economics will lead to a Liz Truss-style economic meltdown, Sir Keir Starmer will warn, after the Reform UK leader set out his party's proposed policies. The Prime Minister is expected to urge the public to reject Reform UK's calls to use 'family finances' as a gambling chip on 'unfunded' tax cuts. This comes after the Institute for Fiscal Studies (IFS) said the party's pledge to increase the income tax personal allowance to £20,000 a year could cost between £50 to £80 billion a year. Speaking at a press conference in central London on Tuesday, Mr Farage said his measures were 'aimed at British families' as he announced plans to scrap the two-child benefit cap and fully reverse the winter fuel payment cuts. Responding to Mr Farage's speech, IFS deputy director Helen Miller said the announcements on winter fuel payments and the two-child benefit cap were 'dwarfed' by the change to income tax personal allowance. On a visit to meet workers at a manufacturing business in the North West, Sir Keir is expected to brand Mr Farage's policies a 'mad experiment'. He will say: 'In opposition we said Liz Truss would crash the economy and leave you to pick the bill. We were right. 'And we were elected to fix that mess. 'Now in Government, we are once again fighting the same fantasy – this time from Nigel Farage. 'Farage is making the exact same bet Liz Truss did. 'That you can spend tens of billions on tax cuts without a proper way of paying for it. 'And just like Truss, he is using your family finances, your mortgage, your bills as a gambling chip on his mad experiment. 'The result will be the same. 'Liz Truss bet the house and lost. '£45 billion in unfunded tax cuts, with no means to pay for them. 'Markets reacted, the economy tanked and we're all still paying the price for mortgages, rents and bills that spiralled out of control. 'I won't let that happen. 'Labour's Plan for Change has stabilised the economy, with growth at the fastest rate in the G7 this year, four cuts to interest rates, and a pay boost for 3.5 million low paid workers.' Short-lived Conservative prime minister Ms Truss' mini-budget spooked the financial markets in 2022 and led to a spike in mortgage rates.
Yahoo
2 days ago
- Business
- Yahoo
Starmer to liken Farage to Truss in policy attack
Prime Minister Sir Keir Starmer has accused Nigel Farage of "fantasy" economics after the Reform UK leader set out a number of policies earlier this week. In a speech later this morning, Sir Keir is expected to liken Farage to former PM Liz Truss and say that Reform's policies would lead to an increase in mortgage costs. Reform made big gains in the English local elections earlier this month, cementing it as a prime challenger to Britain's traditional main parties. A spokesperson for Reform dismissed the prime minister's comments as a "desperate attack" from a party "behind in the polls". Speaking at a business in the north-west of England later, Sir Keir, 62, will accuse the Reform leader of pledging unfunded tax cuts which, he will warn, could spark an economic meltdown. "In opposition we said Liz Truss would crash the economy and leave you to pick up the bill," he is expected to say. "We were right. And we were elected to fix that mess. "Now in government, we are once again fighting the same fantasy – this time from Nigel Farage. "Farage is making the exact same bet Liz Truss did. That you can spend tens of billions on tax cuts without a proper way of paying for it. And just like Truss, he is using your family finances, your mortgage, your bills as a gambling chip on his mad experiment. The result will be the same." Thursday's speech is further evidence that right now the prime minister sees Farage as his principal political adversary. On Tuesday, Farage pledged more generous benefits for pensioners and parents – but it was a commitment to raising the threshold at which someone starts to pay income tax from £12,570 to £20,000 that had some economists questioning whether his sums added up. The Institute for Fiscal Studies said the policy could cost between £50bn and £80bn a year – and that Reform had not spelled out how they would raise the cash. "Of course they don't have to do that yet – we're not at a general election," said IFS economist Stuart Adam. "But at some point, if they're going to be a party of government, they would have to make those numbers add up." In Farage's speech, the former Ukip leader, 61, said the Conservatives had become an "irrelevance", adding: "They've had a good 200 years." The local elections saw Reform make big gains at the expense of both Labour and the Conservatives – winning one by-election and two mayoral races, as well as gaining 677 new councillors. The party won most votes, most seats and overall control of most councils. But, as politics professor Sir John Curtice highlighted, the party's share of the votes across all councils where elections took place was no more than 31% – so despite doing well, it secured far from a majority of those voting. We want to make it easier to have children - Farage Sir John Curtice: The map that shows Reform's triumph was much more than a protest vote Farage defends Reform advert after racism claims A Reform spokesman said: "We will take no economic lectures from Keir Starmer. "Labour's manifesto promised £10bn per year of increased spending. "Their first budget raised spending by £70bn and they have added another £30bn since then for Chagos." The prime minister faces pressure from his own MPs on government spending decisions, including cuts to disability benefits. Farage also said he would scrap the two-child benefit limit, which some Labour MPs also want to see abolished. The cap prevents most families from claiming means-tested benefits for any third or additional children born after April 2017.
North Wales Chronicle
2 days ago
- Business
- North Wales Chronicle
Starmer: Farage's ‘fantasy' economics will lead to Liz Truss-style meltdown
The Prime Minister is expected to urge the public to reject Reform UK's calls to use 'family finances' as a gambling chip on 'unfunded' tax cuts. This comes after the Institute for Fiscal Studies (IFS) said the party's pledge to increase the income tax personal allowance to £20,000 a year could cost between £50 to £80 billion a year. Speaking at a press conference in central London on Tuesday, Mr Farage said his measures were 'aimed at British families' as he announced plans to scrap the two-child benefit cap and fully reverse the winter fuel payment cuts. Responding to Mr Farage's speech, IFS deputy director Helen Miller said the announcements on winter fuel payments and the two-child benefit cap were 'dwarfed' by the change to income tax personal allowance. On a visit to meet workers at a manufacturing business in the North West, Sir Keir is expected to brand Mr Farage's policies a 'mad experiment'. He will say: 'In opposition we said Liz Truss would crash the economy and leave you to pick the bill. We were right. 'And we were elected to fix that mess. 'Now in Government, we are once again fighting the same fantasy – this time from Nigel Farage. 'Farage is making the exact same bet Liz Truss did. 'That you can spend tens of billions on tax cuts without a proper way of paying for it. 'And just like Truss, he is using your family finances, your mortgage, your bills as a gambling chip on his mad experiment. 'The result will be the same. 'Liz Truss bet the house and lost. '£45 billion in unfunded tax cuts, with no means to pay for them. 'Markets reacted, the economy tanked and we're all still paying the price for mortgages, rents and bills that spiralled out of control. 'I won't let that happen. 'Labour's Plan for Change has stabilised the economy, with growth at the fastest rate in the G7 this year, four cuts to interest rates, and a pay boost for 3.5 million low paid workers.' Short-lived Conservative prime minister Ms Truss' mini-budget spooked the financial markets in 2022 and led to a spike in mortgage rates.
Glasgow Times
2 days ago
- Business
- Glasgow Times
Starmer: Farage's ‘fantasy' economics will lead to Liz Truss-style meltdown
The Prime Minister is expected to urge the public to reject Reform UK's calls to use 'family finances' as a gambling chip on 'unfunded' tax cuts. This comes after the Institute for Fiscal Studies (IFS) said the party's pledge to increase the income tax personal allowance to £20,000 a year could cost between £50 to £80 billion a year. Reform UK leader Nigel Farage (Ben Whitley/PA) Speaking at a press conference in central London on Tuesday, Mr Farage said his measures were 'aimed at British families' as he announced plans to scrap the two-child benefit cap and fully reverse the winter fuel payment cuts. Responding to Mr Farage's speech, IFS deputy director Helen Miller said the announcements on winter fuel payments and the two-child benefit cap were 'dwarfed' by the change to income tax personal allowance. On a visit to meet workers at a manufacturing business in the North West, Sir Keir is expected to brand Mr Farage's policies a 'mad experiment'. He will say: 'In opposition we said Liz Truss would crash the economy and leave you to pick the bill. We were right. 'And we were elected to fix that mess. 'Now in Government, we are once again fighting the same fantasy – this time from Nigel Farage. 'Farage is making the exact same bet Liz Truss did. 'That you can spend tens of billions on tax cuts without a proper way of paying for it. 'And just like Truss, he is using your family finances, your mortgage, your bills as a gambling chip on his mad experiment. 'The result will be the same. 'Liz Truss bet the house and lost. '£45 billion in unfunded tax cuts, with no means to pay for them. 'Markets reacted, the economy tanked and we're all still paying the price for mortgages, rents and bills that spiralled out of control. 'I won't let that happen. 'Labour's Plan for Change has stabilised the economy, with growth at the fastest rate in the G7 this year, four cuts to interest rates, and a pay boost for 3.5 million low paid workers.' Short-lived Conservative prime minister Ms Truss' mini-budget spooked the financial markets in 2022 and led to a spike in mortgage rates.
