Winter Fuel Payments just for Pension Credit claimants would be disastrous for millions of pensioners

By Saga reporter , Thursday 3 January 2013

Former care minister Paul Burstow MP has suggested that only paying the Winter Fuel Payment (WFP) to those eligible for pension credit could help pay for social care costs.

PensionsPensioners not on high incomes could be adversely affected

But pensions expert Dr Ros Altmann says that although reforming social care is urgent, taking away WFP from millions of pensioners already struggling with their heating bills is not the answer.

The WFP is already effectively part of the state pension and Dr Altmann says: "The reason we have all WFP is because our basic state pension is so low - one of the lowest in the developed world.

"Of course, in theory, it makes little sense to pay money to wealthy pensioners who do not really need it, but then will the next step be to say that these pensioners don't need the rest of their state pension either? Taxing these payments would raise some money, but means-testing would be a disaster."

Dr Altmann believes that taking money away from older people who have been prudent in providing for their own future would be a further disincentive to hard-working people who have set money aside for retirement. Means-testing would also be complex, inefficient and costly in terms of administration.

Money must also to set aside for urgent social care reforms, but tying WFP to pension credit would be a disaster for millions of pensioners who saved hard all their lives, and have a little extra retirement income as a result of their efforts.

Dr Altmann says: "These pensioners, or those who refuse to claim, will be punished by the extension of means-testing. We need less means-testing - not more - to ensure that those who save for their future do not lose out heavily, and to be certain that all those who need the money do receive it."

And what impact would this have on pensioners on lower incomes? "Not many pensioners are on high incomes," explained Dr Altmann. "Only two per cent of pensioners pay the higher rate tax. Most older people are not living on high incomes, so pensioner benefits and the state pension are of the utmost importance to millions of people."

A solution to the care crisis is also urgently needed. "Of course we are in no doubt that the cost of social care is one of the biggest issues facing this country, but taking away pensioner benefits is not the answer.

"As we await the release of the Care White Paper, we hope that it will outline a fairer partnership between state help and individuals paying for some of their own care costs, with incentives for care savings plans."

But any solution must not be overshadowed by an increase in deaths among pensioners and Dr Altmann added: "As energy bills reach record highs, taking away the Winter Fuel Payment from pensioners who have modest incomes will risk many more older people dying of cold.

"Every winter, more than 20,000 pensioners die of cold in this country and these excess winter deaths would increase if more pensioners were denied this payment."


The opinions expressed are those of the author and are not held by Saga unless specifically stated.

The material is for general information only and does not constitute investment, tax, legal, medical or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.

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  • pauline bonsall

    Posted: Wednesday 10 July 2013

    here we go again......both my husband and me are retired. We paid into a pension scheme. We had to cut back for many years to make sure we had extra income when we would need it.
    We are not wealthy rich or "well heeled". We are just getting what we have paid for nothing more nothing less. Why oh why do those who have had the forthought to think of the future have to have possible cuts taken from their income?

  • Veronica Dowling

    Posted: Friday 14 June 2013

    When WFP was first introduced I was disgusted - as my brother and his wife were BOTH STILL WORKING when they received it. How many more people were given it whilst they were STILL WORKING?

    As soon as the Government want to reduce the Welfare Bill - they immediately look to people of working age - and cut them - either on Longterm Sick or Unemployment Benefit.

  • Mike Tyrrell

    Posted: Friday 04 January 2013

    Paul Burstow MP has suggested that many Pensioners should not be having the Winter Fuel Payment (WFP). I patially agree with him ,but think that the criteria should be Means Tested and that a figure should be agreed as a cap. I would gladly give my payment and my wifes to Help the more needy but only if everybody did the same.

    Also what about those people who live abroad and claim it ,Outrageous !!!

    Regards

    Mike Tyrrell

  • lilian heathcote

    Posted: Friday 04 January 2013

    I was aged 80 on 27.10.32. I got £200 heating allowance only. Am I right in thinking I dont qualify for £300 until nbext year?

  • John Chisholm

    Posted: Friday 04 January 2013

    The WFP is a quite recently introduced benefit when the economy was growing. Now the UK is bust and stagnant, we must get rid of it and concentrate what resources we have in getting our 1m approx unemployed youngsters into work. They would then pay tax and NHI, and then we as a country can make choices how to spend the revenue.

    John Chisholm

  • audret snell

    Posted: Thursday 03 January 2013

    how about the government looking into the prices of the care homes i dont know one owner that is not a millionare surely this cannot be right they should be looked into just like the utility companies as i cannot see how some justify £800 a week or even more please pass this on to some one whom might care thanks

  • Linda Salter

    Posted: Thursday 03 January 2013

    Ros Altmann is, of course, right; allied to which it's accepted that the elderly have increased risk of health problems and likelihood of falls, etc if homes are not properly heated. This might well be a consequence which would then deplete other government funded areas, e.g. the N.H.S.

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