Charities concerned over limiting winter fuel payments as energy prices rise

The energy price cap has risen, meaning millions of families are set to face higher bills just as the winter months arrive - and winter fuel payments are also being axed

The energy price cap hike coincides with the Government's decision to withdraw winter fuel payments for approximately 10 million pensioners.

The Government declared in July that payments would only be made to those receiving pension credit or certain other means-tested benefits, including universal credit. This year, about 10 million individuals will lose this allowance.

The annual tax-free payment, ranging from £100 to £300, was established in 1997 to assist eligible pensioners with their winter heating costs. According to statistics from the Department for Work and Pensions (DWP), the number of recipients last winter was 214,000 more than the 11.4 million in 2022-23, showing a steady increase from 11.1 million in 2020-21.

With the energy price cap set to rise just as winter arrives, the Government is being urged to reconsider its plans to means-test the payment. Charities are calling for a U-turn, and both the Conservatives and the Greens are advocating for all pensioners to receive the payments this winter.

Delegates at Labour’s annual conference supported a union motion to reverse the cut, although the vote does not bind the Government, and ministers have stated that the policy will remain unchanged.

Liberal Democrat Treasury spokeswoman Daisy Cooper said: "Today’s price rise will be a crushing blow to all those pensioners who are wondering how they will get through the coming months without having to choose between heating and eating, after the winter fuel payment cuts. It is not too late for the Government to think again and ensure vulnerable pensioners get the support they need."

Age UK's charity director Caroline Abrahams slammed the decision to limit the winter fuel payment to only those on pension credit as "reckless and wrong" and warned it "spells disaster for pensioners on low and modest incomes". With means testing the winter fuel payment, the Government stands to save £1.4 billion this year, savings Labour claims are essential due to the mismatch between the former government's spending plans and the actual funds provided.

Labour also criticised the previous administration for failing to invest sufficiently in energy efficiency and renewable power. Despite criticism, the Government pointed out that over one million pensioners would continue receiving the winter fuel payment and encouraged any pensioner concerned about bill increases to see if they qualify for pension credit.

Meanwhile, charities like Citizens Advice and groups such as the End Fuel Poverty Coalition have proposed various strategies, including "targeted bill support,” expanding other financial assistance programmes, and reducing fixed standing charges in efforts to ease the escalating energy bill burden.

Andy Manning, head of energy policy at Citizens Advice, has sounded the alarm on the dire situation facing UK households: "This price rise means bills are now around two-thirds higher than before the energy crisis. With record levels of energy debt, the removal of previous support and changes to the eligibility of the winter fuel payment, people are in desperate need. "

Manning is calling for immediate action: "The Government must urgently introduce targeted bill support that reflects the realities of people’s energy needs."

Simon Francis, co-ordinator of the End Fuel Poverty Coalition, said: "We’re now heading into the fourth winter of sky high energy prices. After October 1, bills will be 65% higher than in 2020/21, meaning the average household will have paid more than £2,500 extra for their energy than had we not been so exposed to volatile energy markets."

"For older people who previously received the winter fuel payment, but will no longer do so under the Chancellor’s new rules, the situation is even worse. For many pensioners, this winter will feel like the most expensive on record. What’s worse, there are more price increases on the horizon."

He added: "We welcome the Government’s long-term plans to boost home energy efficiency to bring down bills and to improve energy security to stabilise prices, but these reforms will take time to take effect and will be cold comfort to those struggling this winter. That’s why it is so vital the ministers bring in more support for vulnerable households this winter, reductions in standing charges and a social tariff."

"The energy industry has made more than £457bn profit since the start of the crisis, so there is plenty of money in the system to be able to ensure everyone stays warm this winter and next."