UK

Which pensioner benefits payments are set to go up - and down?

As Keir Starmer continues to face a backlash about the winter fuel payment, what is happening to the other payments available to pensioners?

James Cheng-Morris
·Freelance news writer, Yahoo UK
Updated Mon 9 September 2024 


Sir Keir Starmer is dramatically scaling back the winter fuel allowance. (PA)


Sir Keir Starmer has been accused of “picking the pockets of pensioners” while leaving the richest “totally untouched” as the row over the winter fuel payment continues.

Sharon Graham, general secretary of Unite, urged Starmer to “do a U-turn” on the policy, which would see payments scrapped for millions of pensioners in a winter where the average household energy bill is to increase by £149.

She told BBC Radio 4’s Today programme on Monday: “Leadership is about choices. He needs to be big enough and brave enough to do a U-turn on this choice. It’s completely wrong. People do not understand how a Labour government has decided to pick the pocket of pensioners and, at the same time, leave the richest in our society totally untouched. That is wrong and he needs to change course.”

However, the winter fuel payment is not the only benefit that is set to change for pensioners in the coming weeks and months.
Winter fuel payment

Introduced by the last Labour government in 1997, the winter fuel payment scheme - intended to tackle fuel poverty among pensioners - currently offers annual tax-free payments of up to £300 to anyone over the state pension age in England or Wales.

But in July, chancellor Rachel Reeves announced plans to limit the allowance, saying she needed to fill a £22bn “black hole” in the public finances left by the previous government, a claim the Tories have challenged.

Under the change, only those who claim pension credit and other means-tested benefits will receive it. This is expected to reduce the number of pensioners in receipt of the payment by 10 million - from 11.4 million to 1.5 million - which the government says will save £1.4bn this year.



But Age UK has said two million pensioners who are only just above the income threshold and "badly need the money" will be missing out - and the issue has developed into the first crisis of the Starmer administration.

A motion relating to the changes will be debated in the House of Commons on Tuesday. A backbench rebellion is likely, but given the size of Labour's majority - 158 - it is highly unlikely the vote will not go Starmer's way.
Pensioner cost of living payment

In the winters 2022/2023 and 2023/2024, pensioners received an additional "pensioner cost of living payment", of up to £300, on top of their winter fuel payment.

This was one of the different categories of cost of living payments provided by the previous government.

However, these payments are not being repeated for the upcoming winter. This was confirmed by the Conservative government in November last year, when it said: "There are currently no plans to extend the cost of living payments beyond the spring."
Household support fund

A fund to help struggling households with bills and essentials was set to expire this winter, but was extended last week.

The household support fund, which was due to end at the end of September, will run for another six months with £421m to be provided to councils in England.

How average annual energy bills have changed in the past 18 months. (PA)

Deputy prime minister Angela Rayner said it will “help people who maybe are not entitled to pension credit, who are just above that threshold [for the winter fuel payment], who may struggle this winter”.

But the End Fuel Poverty Coalition warned: "As the winter fuel payment axe plunges more pensioners into fuel poverty, the fund may prove to be inadequate as more vulnerable older people turn to local authorities for help and assistance.”
State pension

Labour has repeatedly cited its commitment to the pension 'triple lock' when defending the winter fuel payment changes.

On Monday, Bloomberg reported that the state pension is set to increase by £500 annually next year.

The current maximum state pension is £221.20 a week - the increase to this is set to be revealed on Tuesday.

Such changes would take the full state pension to around £12,000 in 2025/26, following the £900 increase in 2023. Pre-2016 retirees who may be eligible for the secondary state pension could see a £300 per year increase.

The new state pension system was introduced in 2016 to provide a sustainable, clear foundation pension for people to build their private savings.

The "triple lock" means that the state pension rises each April in line with the highest out of: the Consumer Prices Index (CPI) inflation in September the previous year; average earnings growth in the year from May to July of the previous year; or 2.5%.

However, any increase won't take effect until 1 April next year, meaning it won't help pensioners with their energy bills this winter.