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BBC News
9 hours ago
- Business
- BBC News
Winter fuel payment U-turn in numbers
The government's decision to largely reverse its cuts to winter fuel payments has raised questions about its spending and savings plans - and its fiscal Verify has been looking at the the key numbers. What has changed on winter fuel? At the time Labour won the 2024 general election, the Department for Work and Pensions was projecting that 10.8 million pensioners in England and Wales would be eligible for winter fuel payments in payments are worth either £200 or £300 per household. The new government, in order to save money, decided that only pensioners in receipt of pension credit (a separate benefit aimed at low-income pensioners) would receive winter fuel payments that winter - and said that would reduce the number of individual recipients to 1.5 the government has changed course - after widespread criticism - and said that, from 2025-26, all pensioners will get it, although it will be clawed back in the following tax year from individuals earning £35,000 and claims this means about 9 million pensioners will now be eligible.. The effect of this is largely to undo the impact of its initial policy in terms of the numbers affected. How much will this cost? The government estimated that the cost of the winter fuel payment system it inherited in 2024-25 would have been £ estimated that its initial reform last year would cut this bill by £1.4bn in 2024-25 (rising to £1.5bn in 2025-26) taking the cost of the system down to £0.5bnNow the government says the cost of the system after its latest change will be £1.25bn - a saving of £450m relative to a system in which all pensioners were eligible to receive the government added that this £450m saving has not yet been certified by the Office for Budget Responsibility (OBR) - the government's official if it transpired, this saving would be only a third of the original £1.5bn savings target. And some analysts think the overall net saving for the government could actually be lower Labour's initial 2024 reform, winter fuel payments were only available to those in receipt of a separate benefit aimed at low-income pensioners, called pension year, the government initiated a campaign to encourage the hundreds of thousands of pensioners who are eligible for pension credit, but who do not claim it, to start doing latest data shows almost 60,000 more pension credit claims were awarded than otherwise might have been, likely because of the government's awareness campaign. With each annual pension credit claim costing the government £3,900 a year on average, the former Lib Dem pensions minister Steve Webb has calculated that the total annual cost of these new claims could be about £ additional cost would offset around half of the £450m savings claimed by the government for its latest changes to winter fuel eligibility. How can the government afford this U-turn? When Chancellor Rachel Reeves announced the tightening of winter fuel payments in 2024, she said the £1.5bn per year savings were needed to stabilise the public those savings were entered into the OBR's budget calculations. Now the savings will only be £450m per year - or even lower - a gap of at least £1bn will open up in the government's Treasury said it will address this gap in the next Budget in the Autumn of 2025 and said "it will not lead to permanent additional borrowing".Assuming the OBR does not raise its GDP growth and tax revenue forecasts in the Budget, giving the government more money to fill the gap, this will imply ministers would either have to raise additional taxes or cut spending elsewhere to close this roughly £1bn gap .However, it should be noted that £1bn is a relatively low sum in the context of the public 2025-26 the government is projected by the OBR to spend £1,347bn and to borrow £ is also worth noting that the projected savings from the government's working age welfare reforms, announced earlier this year, are considerably higher than the savings from changing eligibility for winter fuel changes in eligibility for personal independence payments and the cuts to universal credit incapacity payments are projected by the OBR to save the government £4.8bn a year by 2029-30. If the government were to reverse or water down those reforms, as some Labour MPs are urging, it would create a considerably larger financial headache for the chancellor in terms of meeting her fiscal rules specify that she has to be projected to be on course to balance the government's day-to-day spending budget (which excludes spending on infrastructure) by March 2025, the OBR projected that she had just £9.9bn of "headroom" against this rule, a very small amount of leeway given the size of overall government spending and the welfare cuts would wipe out around half of many economists expect the chancellor's projected headroom to be further eroded by the OBR in any case in the Autumn Budget as a result of downgraded growth forecasts and an increase in government market borrowing costs in recent months. What do you want BBC Verify to investigate?
Daily Mail
6 days ago
- Business
- Daily Mail
How much has soaring take-up of pension credit eaten into Winter Fuel Payment savings?
Pension credit claims have soared as poorer pensioners try to hang on to their Winter Fuel Payments, eating into savings the Government hoped to make, This is Money analysis shows. Some 58,800 extra pension credit claims have been awarded since means-testing of the annual payment, worth up to £300 per household, was announced last summer. That represents a 57 per cent jump to 162,800 successful claims between last July and the end of May. Pension credit tops up weekly income to a minimum of £227.10 for single people and £346.60 for couples - and is worth £4,000 on average a year to those eligible. Extra claims therefore will have cost the Treasury around £235million, versus projected savings of £1.3billion from restricting Winter Fuel Payments in the first year, and £1.5billion in subsequent years. However, this sharp increase in claims was actively encouraged by the Government, which has tried to drive up pension credit applications. So, it is likely to have been anticipated and factored into the sums to some extent. The Government has now U-turned on its scrapping of Winter Fuel Payments for most pensioners, and said more will be made eligible. MPs grilled Pensions Minister Torsten Bell on how this will be achieved when he appeared before the work and pensions committee on Wednesday morning. The committee put out a statement in advance of the hearing about the restriction of formerly universal Winter Fuel Payment to those in receipt of pension credit. It said: 'Following a backlash against the move, the Prime Minister announced that he would make more people eligible this winter, without saying how many or how. 'Bell will be questioned on how the Government is tackling poverty in retirement, including around pension credit. 'In previous sessions, the committee has heard how many pensioners are having to tighten their belts as a result of the increased cost of living and the support cliff-edge experienced by those who are just above the pension credit threshold and consequently miss out on thousands of pounds in income support.' If you are elderly and not well off, pension credit tops up weekly income and also opens the door to a lot of additional help with household bills. You can gain many further thousands of pounds, including help with housing costs, heating, council tax, TV licences if you are over 75, and other bills. > Claiming pension credit: Find out how to top up your weekly income Morgan Vine, director of policy at charity Independent Age, says: 'While this increase in pension credit recipients is a positive step, it is sadly still a drop in the ocean compared to the latest pension credit take-up figures which show there are almost a million eligible older people not receiving this entitlement.' She is urging the Government to introduce a take-up strategy that targets those on very low incomes and in need of support, and notes the latest claim figures reveal a large number of unsuccessful applications. 'There is a real person behind each application that made the decision to seek out financial support,' says Vine. 'In many cases, they will be living on a low income but sitting just above the pension credit threshold by only a few pounds. 'The older people we speak to in this situation have been forced into making drastic cutbacks just to get by. 'We have heard terrible accounts of people not washing to save on water, having one small meal a day and avoiding meeting up with loved ones as they cannot afford to buy a hot drink in a cafe. This cannot be allowed to continue.' Tom Selby, director of public policy at AJ Bell, says: 'The furore over Rachel Reeves' decision to scrap the Winter Fuel Payment for all but the lowest income pensioners has created a political nightmare for the Government, with the issue repeatedly raised on the doorstep during the local elections and seized upon by Labour's opponents. 'What's more, the dramatic rise in pension credit applications following the change will eat into the already limited savings the Chancellor expected to make from the policy.' He says at the time of the Winter Fuel Payment announcement, the Government said it wanted to ensure pension credit was being claimed by every eligible pensioner, with estimates suggesting around 800,000 were failing to claim the benefit. Selby adds: 'The Government would surely argue that boosting pension credit uptake is a worthy outcome anyway, regardless of the Winter Fuel Payment issue.' Jon Greer, head of retirement policy at Quilter, says: 'Pension credit has been a perennially underclaimed benefit. 'But the Government's decision to means test the Winter Fuel Payment has clearly kicked many into action to start claiming it in order to receive the highly prized payment.' Greer says the surge in applicants may have left many disappointed as 146,000 claims were not awarded between last July and the end of May, a 99 per cent increase on the year before. Meanwhile, he says the increase is also having a huge impact on the systems used by the Government to assess claims 'Our recent freedom of information request found that pension credit application processing times peaked at 87 working days in December 2024, significantly above the Department for Work and Pensions' 50-working-day target. 'If we are to make the drive to get people on the correct benefits, we must not be leaving them in limbo for that long.' Greer adds recent figures show the DWP has reduced the pension credit backlog from 85,500 at its peak in December 2024 to 10,800 in mid-May. Stephen Lowe, a director at Just Group, says of the boost in pension credit take-up: 'This is a significant success that will see these low income pensioner households receiving this much-needed financial support as well as unlocking the gateway to other valuable benefits.' But he says there is an important job to be done to increase the take up of pension credit. 'People may be failing to claim for a number of reasons – they may simply be unaware of the benefit, not know how to claim or assume they are not eligible if they own their own home. Lowe urges people who might qualify, or their family members, to use the Government's calculator to check eligibility, or contact charities or their local council for help.
Telegraph
20-05-2025
- Health
- Telegraph
You could be missing out on over £4,000 of free stuff for over 60s
Budgets are being stretched to the extreme this year, with inflation at heights not seen in a generation. The pound in your pocket is now worth much less – which makes it all the more important to make sure that you are getting all the support you are owed. There is a lot of support available for pensioners, ranging from government benefits to company freebies and discounts. Using all the help available could help you save hundreds of pounds a year, if not more – but not all perks are given automatically, so it's all too easy to miss out. Here, Telegraph Money sets out the essential money-saving tips every retiree should know. NHS freebies Once you hit 60, you are entitled to free NHS medical prescriptions in England (prescriptions are free in Northern Ireland, Scotland and Wales), which usually cost £9.90 for each medicine or appliance dispensed. If your date of birth is printed electronically on your prescription, then you should not need to provide any other evidence that you don't need to pay. Over 60s can also get free eye tests in England, which can start from around £25. You'll usually need to fill out some NHS forms for your optician when you reach 60 to ensure you no longer get charged for future tests. If you're receiving the 'guarantee credit' part of pension credit (more on this later), then you are also entitled to free NHS dental treatment, which could save around £27.50 every time you go for a scale and polish, according to the NHS. This element of pension credit can also enable you to claim help with travel costs if you need to go to hospital for NHS treatment or diagnostic tests – but you must first tell the hospital that you want to claim back the cost of your journey, and it will help you with the next steps. The annual flu jab is also free once you hit 65, which you'd otherwise have to pay for privately. If you are under this age, then the flu jab is only free if you have a long-term health condition that puts you at risk of complications if you catch the flu, such as a heart or lung condition, diabetes or asthma. The flu jab is free if you receive Carer's Allowance or are an informal carer of an older person who relies on you for care. Travel discounts If you are aged 60 or over, or under this age and have a disability, you might be eligible for public transport concessions. If you live anywhere in England, then you can get a bus pass for free local travel when you reach the state pension age, which is currently 66. In Wales, Scotland and Northern Ireland you can get a bus pass earlier, at the age of 60. If you are 60 or over and live in London, then you can get free travel on buses, trains and other modes of transport in and around the city with a 60+ Oyster photocard. You may also be able to get a London Freedom Pass, which gives residents over the age of 66 free travel in the city across National Rail, the Underground, buses, river services and trams. This could save you up to £8.10 every day, which is the cap on travel between zone 1 and 2. There are other transport providers offering discounts, such as National Express. It offers Coachcards, which are discount cards for older or disabled customers. You can buy them for a set fee of £15 and they give you a third off the cost of your travel for a year. Based on taking four fully flexible return journeys from London to Bristol during this year, you could stand to save £52.80, quickly making back your money. If you take the train regularly, National Rail has a Senior Railcard for £35 a year or £80 for three years, where you can save an average of £112 a year on rail fares. Cheap days out Pensioners can also take advantage of big discounts at a huge range of museums, galleries and other attractions. For example, English Heritage offers people aged over 65 a membership of £5.75 a month or £69 per year, compared with £6.83 and £82 respectively for standard membership. Odeon, Vue and Empire cinema chains offer cheaper tickets to pensioners. Odeon Silvers, for example, is for over 60s who want to see films during quieter times of the day. Tickets are from £3.50, and the price includes tea, coffee and biscuits served before the film starts. Some football clubs also include a discounted senior citizen rate for tickets; for example, Chelsea fans over the age of 65 could save over £500 on a 2025-26 season ticket by going for the senior ticket option. Elsewhere, The Royal Shakespeare Company offers a 20pc discount on all seats for Monday and Tuesday evening performances, and all midweek matinees for those aged over 65. Pension credit
Daily Mail
15-05-2025
- Business
- Daily Mail
Pension credit fraud balloons resulting in overpayments hitting a record high
Overpayments of pension credit have reached a new record high of 10.3 per cent for the financial year ending in April 2025, new data reveals. These overpayments mean taxpayers have overpaid more than £610million, rising from £530million, or 9.7 per cent, a year ago, according to figures from the Department for Work and Pensions. Fraud accounted for almost half of the overpayments, reaching its own record of £270million, increasing from £210million the previous year, the data showed. Claimant error accounted for £240million of overpayments, also rising from £210million previously, while official errors accounted for just £100million, falling from £110million. The two main causes of overpayments were under-declarations of financial assets and claimants remaining abroad for longer than is allowed. These accounted for £6 of every £10 overpaid in pension credits in the last financial year. Jon Greer, head of retirement policy at Quilter, said: 'Given that pension credit is targeted at some of the most financially vulnerable pensioners, the system needs to strike a careful balance between accessibility and fraud prevention and it appears to be struggling on both fronts. 'A large share of overpayments stemmed from people failing to declare financial assets or staying overseas for longer than the rules permit, highlighting the difficulty of monitoring eligibility for a means-tested benefit with complex rules.' Meanwhile, the DWP said 1.2 per cent of pension credit claims were underpaid, accounting for £70million. This increased from one per cent the year prior, with £50million underpaid. However, the DWP said the proportion of underpaid claims reduced to three out of every hundred, from four the year before. Greer said: 'Underpayments of pension credit, while lower in proportion, still amounted to £70 million, and nearly £7 in every £10 underpaid was due to administrative failings. 'These errors mostly relate to additional amounts for severe disability, which are often the lifeline for those on the lowest incomes. State pensions, were also underpaid by as much as £450million, though this was a decrease from £470million a year ago. 'Underpayments remain a bigger issue than overpayments,' Greer said, 'with £450million of state pension payments not reaching the people entitled to them. 'That includes many women who were impacted by historical issues with Home Responsibilities Protection, a now-defunct mechanism designed to protect the pensions of those with caring responsibilities.' Steve Webb, partner at LCP and This is Money's pensions agony uncle, said: 'Given how complex the system is, it can be hard for people to know if they are getting the right amount or not, so it is all the more important that the Government gets it right. 'You would have hoped that all of the recent correction exercises would have resulted in a falling rate of errors, so it is all the more shocking to see underpayment rates increasing. 'DWP need to redouble their efforts to track down these errors and fix them as a matter of urgency.' State pension overpayments, while accounting for 0.1 per cent of payments, still equated to £190million. Greer said: 'What's more concerning is the sharp rise in official error. Overpayments due to administrative mistakes by the DWP tripled in value from £20million last year to £110million, a statistically significant increase driven by miscalculations on the additional components of the state pension. 'These figures underscore the importance of proactive communication from the DWP and HMRC, particularly for people with complex entitlements. Given how vital these benefits are in old age, there's little room for error.'
Sky News
06-05-2025
- Business
- Sky News
Politics latest: PM urged to rethink two major policies - as Tory leader admits 'we don't have much time'
What did Labour do to winter fuel payments? Following their drubbings in the first set of elections since forming a government last year, there are reports Labour are reconsidering their controversial changes to the winter fuel payment. You'll likely recall it was one of the first policy announcements by the chancellor last July - she said it would help fill a £22bn "black hole" in Britain's public finances. It had previously been a universal benefit for all pensioners to help them pay for their winter fuel bills, but is now means tested so only the very poorest still get it. Who is now eligible for the winter fuel payment? Labour limited it to people over state pension age who are receiving pension credit or a limited number of other benefits. These benefits are income support; income-based jobseeker's allowance; income-related employment and support allowance; universal credit. The number of people eligible dropped from 11.4 million to 1.5 million. How much is the payment? The payment is £200 for households receiving pension credit where the recipients are all under 80. If someone in the household is over the age of 80, it's £300. What were the rules before? The payments were available to everyone above state pension age. Most people got the winter fuel payment automatically. Who is eligible for pension credit? Pension credit is available to pensioners whose income falls below a certain threshold - the payment tops up their income to this amount. For people with a partner, income is calculated together. Income includes state and private pensions, earnings, and social security benefits including a carer's allowance. But not everything counts as income - disability payments, housing benefit, and council tax reduction aren't counted. Pension credit tops up your weekly income to £218.15 if you're single and £332.95 if you have a partner. Pension credit is often described as a "gateway benefit" as it can lead to further support, including help with housing costs and council tax. The benefit can be claimed by phone and online, and an online calculator can help pensioners check if they are likely to be eligible and get an estimate of what they may receive.
