The massive winter fuel payment ‘cut’ no one ever talks about

The anger caused by Labour scrapping the universal winter fuel payment earlier this year has been well publicised – but a less talked about cut to the benefit has been taking place every year since 2000.

About 1.3 million people in England and Wales who are entitled to certain means-tested benefits can get either £200 or £300, down from more than 11 million previously.

These amounts have not changed in more than two decades, despite periods of sky-high inflation, and energy prices rising exponentially in recent years.

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Sky News analysis in the Money blog shows that the £200 available for 60 to 79-year-olds would be worth £370 today if it had risen in line with inflation.

If it had risen in line with energy prices, it would be worth almost £1,000 now, and would’ve paid out more than £1,200 during the peak of the energy price crisis in the winter of 2022-23.

The payment for the over 80s was raised to £300 in April 2003. If that had risen with inflation since then it would be worth more than £500 now.

If it had risen by the same as energy prices, it would be worth more than £1,200 now, and would’ve topped £2,000 in 2022-23.

This significant, annual real-terms cut has, over the past 13 years, coincided with pensions rising in real terms due to the triple lock – potentially offsetting some consequences of freezing the payment.

But charities who spoke to Money say vulnerable pensioners are suffering due to the payment’s stagnation.

Caroline Abrahams, charity director at Age UK, said: “Energy prices are much higher than they were a few years ago, and yet the winter fuel payment which was designed to support pensioners in meeting these costs has remained the same.

“Most recently, of course, the current government has decided to brutally ration access to the payment, the main qualification for it now being that you are in receipt of pension credit.

“The lack of commitment to winter fuel payment by governments of all colours arguably reflects a lack of insight in Whitehall about the difficulties older people on low and modest incomes face in making their money stretch to cover the basics, especially during the colder months when they need to stay warm to protect their health.”

Disability Rights UK pointed to a report this week that estimated 10,400 terminally ill people die in poverty each year.

It is therefore “astounding”, the charity says, that the winter fuel payment hasn’t been raised in decades.

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Policy and campaigns officer Dan White said: “Energy bills are rising, energy companies are recording huge profits, poverty is increasing, so there is ample proof that the current winter fuel payment is out of touch with the financial reality of disabled pensioners’ lives.

“An increase is not just justified, it is imperative, and we need an energy social tariff targeted at those facing high energy costs, including disabled and older people. If government fails to act accordingly, there will be a humanitarian crisis on our doorstep.”

We asked the government if raising the winter fuel payment was something it would look at. The Department for Work and Pensions told us:

“We are committed to supporting pensioners – with millions set to see their state pension rise by up to £1,700 this parliament through our commitment to the triple lock.

“Over a million pensioners will still receive the winter fuel payment, and our drive to boost pension credit take up has already seen a 152% increase in claims.

“Many others will also benefit from the £150 warm home discount to help with energy bills over winter while our extension of the household support fund will help with the cost of food, heating and bills.”