First Minister John Swinney has confirmed that pensioners in Scotland will receive no less than they would under the new UK Winter Fuel Payment scheme.
During a speech on public service reform and preventative public health measures to ensure Scots live longer, healthier, wealthier lives, the First Minister confirmed further details of the Winter Fuel Payment scheme will be set out in due course and that ‘the Scottish Government will always seek what is best for Scotland’s pensioners’.
The First Minister said: “Prevention is the hard-nosed financial principle behind the decisions we have taken, for example, on the Winter Fuel Payment. The Winter Fuel Payment kept some of the most vulnerable in society warm in winter – it was always the right thing to do but it was also the smart thing to do.
“Smart because it kept people out of hospital, in their own home. It kept them warm and well. And then it was gone. To be quite blunt about it, I don’t believe cutting this winter lifeline was ever going to save a penny because making millions of pensioners poorer makes them also colder and makes them also sicker and that in turn puts up the bill for our social services and our NHS.
“It is an almost textbook definition of a false economy.
“Keeping the Winter Fuel Payment looks after our pensioners, but it also looks after our NHS. That is the sharp financial reality of the prevention principle in action. It is one of the reasons we were so quick to step in to protect pensioners in Scotland as best we could from that wrong decision by the UK Government.
“And now they have seen the error of their ways, my government will once again do right by Scotland’s pensioners.
“I am very happy to confirm that no pensioner in Scotland will receive less than they would under the new UK scheme.
Details will be set out in due course by my Government, but the Scottish Government will always seek what is best for Scotland’s pensioners.”
Everyone over the State Pension age in England and Wales with an income of, or below, £35,000 a year will benefit from a Winter Fuel Payment this winter.
This increased threshold means no lower or middle-income pensioners will miss out, with the vast majority – over three quarters – of pensioners in England and Wales receiving the payment.
Support will continue to be targeted, with pensioners above this threshold having the payment automatically recovered or able to opt out.
Nine million pensioners to receive Winter Fuel Payments this winter as all pensioners in England and Wales with an income of, or below, £35,000 a year will benefit from a Winter Fuel Payment.
This extends eligibility to the vast majority of pensioners, with around 9 million, or over three quarters, benefitting. This threshold is well above the income level of pensioners in poverty and is broadly in line with average earnings, balancing support for lower income pensioners with fairness to the taxpayer
This change will cost around £1.25 billion in England and Wales and see means-testing of the Winter Fuel Payment save around £450 million, subject to certification by the Office for Budget Responsibility compared to the system of universal Winter Fuel Payments.
The costs will be accounted for at the Budget and incorporated into the next OBR forecast. The Chancellor will take decisions on funding in the round at that forecast to ensure the government’s non-negotiable fiscal rules are met. This will not lead to permanent additional borrowing.
No pensioner will need to take any action as they will automatically receive the payment this winter, and for those with incomes above the threshold it will be automatically recovered via HMRC.
The payment of £200 per household, or £300 per household where there is someone over 80, will be made automatically this winter. Over 12 million pensioners across the United Kingdom will also benefit from the Triple Lock, with their State Pension set to increase by up to £1,900 this parliament.
Chancellor of the Exchequer Rachel Reeves said: “Targeting Winter Fuel Payments was a tough decision, but the right decision because of the inheritance we had been left by the previous government. It is also right that we continue to means-test this payment so that it is targeted and fair, rather than restoring eligibility to everyone including the wealthiest.
“But we have now acted to expand the eligibility of the Winter Fuel Payment so no pensioner on a lower income will miss out. This will mean over three quarters of pensioners receiving the payment in England and Wales later this winter.”
Pensioners above the £35,000 threshold will have the full amount of the Winter Fuel Payment they received automatically collected via PAYE, or via their Self-Assessment return.
No one will need to register with HMRC for this or take any further action. Pensioners who want to opt out and not receive the payment at all, will be able to do so, with details to be confirmed.
Making these changes now gives people certainty and ensures that payments can be made in time for this winter. Payments will be better targeted than before 2024-25 when they were previously paid to all pensioners regardless of their income, meaning those on lower and middle incomes will still receive the help they need, ensuring fairness for both pensioners and taxpayers.
Approximately 2 million individuals in England and Wales over State Pension age have taxable incomes above £35,000.
Social Justice Secretary Shirley-Anne Somerville has written to UK Work and Pensions Secretary Liz Kendall, calling for an urgent change to the UK Government’s “immoral and reckless” social security reforms.
Ms Somerville welcomed the suggestion by Prime Minister Keir Starmer that cuts to winter fuel payment could be eased, but said this was not enough.
In the letter the Social Justice Secretary said: ‘I was pleased to hear the Prime Minister announce plans to ease the Winter Fuel Payment cuts in Parliament last week.
‘I am also aware of various media reports suggesting that a change in the UK Government’s two-child limit may be announced shortly. I welcome these developments and recognise that it is a step in the right direction to delivering a more robust Social Security system.
‘However, deep concerns remain around the UK government’s damaging social security reforms, including those announced in the ‘Pathways to Work’ Green Paper.
‘Given the speculation on the reversal or partial reversal of policies on Winter Fuel Payment and Two Child Cap, I call on you to urgently scrap these immoral proposals on disabled benefits.
‘These plans will only push more into poverty. It is therefore reckless and totally unacceptable for the UK Government to press ahead, not least due to the expected severity of the impact they will have on all our efforts to end child poverty – completely undermining the work of the UK Child Poverty Taskforce.’
The UK needs a national mission to raise living standards and provide people with hope that things will get easier, starting with the restoration of a Winter Fuel Payment to all pensioner households, First Minister John Swinney has said.
Speaking ahead of talks with Prime Minister Sir Keir Starmer in London, the First Minister said he will press for action to help people struggling with the ongoing cost of living crisis, amid increasing inflation and international economic instability.
Mr Swinney said the first action of the UK Government must be to accept the cut to the Winter Fuel Payment was wrong and announce a restoration so all pensioners get a payment.
The First Minster said people need to believe things can get easier and that he plans to raise specific concerns relating to Scotland’s economy with the Prime Minister which could help accelerate economic growth.
This includes the impact on Scotland of the recently announced UK-US trade deal, the agreement reached with the European Union, Carbon Capture and the case for a bespoke migration policy for Scotland.
Mr Swinney will be in London for a programme of meetings, including a bilateral with the Prime Minister, a multilateral with the First Minister of Wales, First Minister and deputy First Minister of Northern Ireland, and a plenary session of the Council of Nations and Regions.
First Minister John Swinney said: “People across the UK are living through a period of huge uncertainty and for some, that is undermining the trust they have in government.
“Cutting the winter fuel payment saw the UK Government breaking promises and removing vital financial support for some of the most vulnerable in our society. Having effectively conceded the argument by announcing a partial U-turn, the Prime Minister should accept the cut was wrong and restore a universal winter fuel payment.
“In Scotland, we are introducing universal winter heating payments through our Cost of Living Guarantee. This will see payment made to all pensioner households, with the poorest receiving the most support which is fair amid ongoing pressures.
“If the UK government want to provide people with hope that things will get easier, the Prime Minister should restore the winter fuel payment as part of a new national mission to raise living standards.
“I will raise this issue with him alongside other critical issues, including our proposal for a Scottish Graduate Visa, Carbon Capture and what impacts recent trade deals will have on Scottish producers and businesses.
“We are willing to work with him and the UK Government, but the question is whether he is willing to work with Scotland and give people hope that a better future is possible.”
The First Minister will hold bilateral talks with the Prime Minister in London today – Friday 23 May.
The First Minister is then due to join the First Minister of Wales, the First Minister and Deputy First Minister of Northern Ireland for further talks, before joining a meeting of the UK Government’s Council of Nations and Regions.
Universal payments to be reinstated from next year
The Scottish Government will provide universal support through the introduction of Pension Age Winter Heating Payments next year ensuring a payment for every pensioner household in winter 2025-26.
Social Justice Secretary Shirley-Anne Somerville has confirmed that on the roll-out of the new benefit next winter, pensioners in receipt of a relevant qualifying benefit, such as Pension Credit will be receiving Pension Age Winter Heating Payments of £300 or £200, depending on their age. Meanwhile all other pensioner households will receive £100 from next winter, providing them with support not available anywhere else in the UK.
Ms Somerville also announced a £41 million package of support for people struggling with energy costs this winter. These measures include an additional £20 million which will be provided for the Scottish Welfare Fund, to enable councils to provide more vital support to people in crisis this winter.
An additional £20 million will be invested into the Warmer Homes Scotland Scheme, the national fuel poverty scheme which helps people install energy efficiency measures and more efficient heating systems, saving on average around £300 per year in household energy bills.
Meanwhile grant-funding of £1 million will be made available to registered social landlords and third sector partners to fund work to help sustain tenancies and prevent homelessness. This is in response to calls from a coalition of housing and anti-poverty organisations for a shift in spending from crisis intervention to prevention.
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Ms Somerville said: “The measures I have announced today will go some way to allay the fears of pensioners in Scotland ahead of next winter, but the Scottish Government recognises that more must be done.
“Ahead of next winter I will bring forward regulations to introduce universal Pension Age Winter Heating Payments in winter 2025-26 for Scottish pensioners.
“This universal benefit – providing much needed support not available anywhere else in the UK – will deliver support for all pensioner households as we had always intended to do before the UK Government decision to means-test Winter Fuel Payments cut the funding available to support our new benefit in Scotland this winter by £147 million.
“We will not abandon older people this winter or any winter. We will do our best to make sure no-one has to make a decision between heating and eating, and we will continue to protect pensioners”.
Reacting to yesterday’s announcement by the Scottish Government, Debbie Horne, Scotland Policy and Public Affairs Manager at Independent Age said: “The reintroduction of winter heating support for all pensioners in Scotland from next winter is welcome and will offer some comfort to the 900,000 pensioners who were set to completely lose the previous Winter Fuel Payment.
“Since the decision to restrict the Winter Fuel Payment to only older people on Pension Credit, we’ve seen a surge in the number of older people getting in touch with Independent Age who are worried about heating their homes, and making ends meet, through the winter. Many have told us they are heating only one room, staying in bed all day with a blanket, and cutting back on food to avoid the energy costs associated with cooking.
“With energy prices set to rise again in January, and a staggering 330,000 older households living in fuel poverty in Scotland, it is clear that changing the eligibility of the payment in this way was the wrong decision. It is positive that this has been recognised in Scotland, with the Scottish Government making a payment available to all older people next year, and we hope the UK Government will also reconsider their decision.
“In a compassionate and socially just society, no one should face fuel poverty. We are pleased the Scottish Government has listened to older people, and taken this action today. However, we remain concerned about older people who face this winter without this much needed financial support.
“Going forward, the Scottish Government should continue to monitor the situation and be open to taking further action in future.”
A spokesperson for AGE SCOTLAND said: “Bringing back an energy support payment for all pensioners is very good news and will be a huge relief. It shows the power of this campaign and the relentless efforts from all quarters.
“The decision to remove the universal winter fuel payment by the UK Government, and its impact on pensioners this winter is nothing short of disastrous.
“Over the last few months we have been urging the Scottish Government to bring this back and we are delighted that they have listened to the strong arguments and have taken action.
“It also demonstrates the power of devolution and what Scotland can do when we put our minds to it.”
Energy regulator Ofgem has today (Friday 22 November) announced a 1.2% increase of the energy price cap for the period covering January-March 2025.
The change to the price cap – which sets a maximum rate per unit and standing charge that can be billed to customers for their energy use – will rise by £21 for an average household per year or around £1.75 a month.
For an average household paying by Direct Debit for dual fuel this equates to £1,738 per year. This is 10% (£190) cheaper compared to January-March 2024 (£1,928) and 57.2% (£2,321) less than the energy crisis (January-March 2023).
It comes as analysis by Ofgem shows around 1.5million households switched tariff over the past three months. The regulator is urging customers to take advantage of the rising choice in the market and look for the best deal to help keep their household bills down. By switching, savings of up to £140 are currently available.
Following a call by Ofgem in August for suppliers to offer more choice with low and no-standing charge tariffs, there has been an increase in the number of suppliers offering these kinds of deals. There are currently 8 available that are at least 10% below the level set in the price cap.
However, while these come with a lower standing charge, they do have a higher unit rate. They could benefit customers with lower energy usage but will not work for everyone so consumers should carefully consider what works for them.
Tim Jarvis, director general of markets at Ofgem, said: “While today’s change means the cap has remained relatively stable, we understand that the cost of energy remains a challenge for too many households.
“However, with more tariffs coming into the market, there are ways for customers to bring their bill down so please shop around and look at all the options.
“Our reliance on volatile international markets – which are affected by factors such as events in Russia and the Middle East – means the cost of energy will continue to fluctuate. So it’s more important than ever to stay focused on building a renewable, home-grown energy system to bring costs down and give households stability.
“In the short term though, anyone struggling with bills should speak to their supplier to make sure they’re getting the help they need and look around to make sure they’re on the best, most affordable deal for them.”
The regulator is encouraging customers to consider the way they pay their bills. Around 5 million customers pay by standard credit payments – which means paying for energy after it has been used. But this is much more expensive, particularly over the winter months.
Customers could save £100 by simply switching from standard credit payments to Direct Debit payments or smart PPM, which remains the cheapest way to pay for energy.
The cheapest deal on the market could save a typical dual fuel customer £210 compared to the upcoming price cap level. However, this requires signing up for an additional boiler cover service.
There are other cheaper fixed deals on the market which don’t require additional services that could save customers more than £140 per year compared to the upcoming cap level.
If consumers are worried about paying their bills, they can contact their supplier for support. Ofgem’s rules mean they must work with their customers to agree an affordable payment plan. They may also be able to help by offering more time to pay, access to hardship funds and advice on how to use less energy.
Age Scotland’s Policy Director, Adam Stachura, said: “This latest increase to the energy price cap is yet another blow for older people facing the coldest months without the safety net of the Winter Fuel Payment.
“At a time when many are already feeling under pressure, news that bills are set to rise further still will put those already struggling in an extremely difficult position. They will be very disappointed that there is no end in sight, and no support measures identified for those not claiming or not eligible for Pension Credit.
“Pensioners in Scotland are the most starkly affected by fuel poverty, so government must deliver much more to support them or the numbers in this grim position will spiral further. This another compelling reason for the Scottish Government to bring back the universal entitlement to the Winter Age Pension Heating Payment next winter.
“With Scotland already recording the coldest temperatures in the UK, we are seriously concerned about older people’s health being jeopardised if they are unable to heat their homes.”
Consumer Scotland Head of Energy Kate Morrison said: “Although lower than at the peak of the energy crisis, energy bills are still historically high and will rise further in January.
“One of the legacies of the past two years of high bills has been a growth of energy debt and arrears in the GB domestic market which now exceeds £3.6bn – a record high – and bill increases will impact further on levels of debt
“This will be a challenging winter for consumers, particularly those with higher energy needs including disabled people and those with health conditions.
“There is a need for governments to design and deliver better targeted energy affordability support for consumers, particularly given current levels of debt and ongoing pressure on household budgets.”
We strongly oppose the decision to restrict #WinterFuelPayment eligibility to only those in receipt of Pension Credit as it means 89% of Scottish pensioners will go without this vital support to stay warm this winter.
Statistics published today by the DWP, reveal that just 65% of older people who are entitled to Pension Credit were receiving the payment between April 2022 and March 2023.
Independent Age estimate that in Scotland this means that up to 70,000 older households could be missing out on the Pension Credit they are entitled to, with a combined value of £140 million.
We know there has been an increase in applications since the UK Government announcement that the Winter Fuel Payment would be means tested, but it is unclear how many of these will result in successful claims.
Both Governments must work together to address the issue of low take-up of Pension Credit and the unacceptably high levels of poverty in later life. Independent Age is urging the UK Government to review and ensure overall adequacy of the social security system for older people, to prevent pensioner poverty.
Alongside calling on the Scottish Government to introduce a pensioner poverty strategy for Scotland – setting out the actions that can be taken alongside with local authorities, to tackle poverty in Scotland.
Debbie Horne, Scotland Policy and Public Affairs Manager at Independent Age, said:“What is clear from the figures released today is that too many older people living on a low income are still missing out on Pension Credit in Scotland, and across the UK.
“There has been a disappointing lack of progress on Pension Credit take-up. We estimate that up to 70,000 older households could be missing out on Pension Credit between April 2022 and March 2023 worth a combined £140 million.
“Independent Age is urging the UK Government to maintain the Winter Fuel Payment in its current form until significant action can be taken to substantially increase Pension Credit take-up.
Previous strategies have not moved the dial, we can’t have more of the same. We need an innovative, evidence-based, long-term take-up strategy that maps out how older people living in, or on the edge of, poverty can access the financial support they are entitled to.
“It is too early to say what the impact of the recent increase in claims for Pension Credit will have on overall take-up rates. However, there is no room for complacency when an estimated 70,000 older households in Scotland are missing out on this much needed money and 150,000 live in poverty. In a socially just and compassionate society, we can and should do more.”
UK Government urged to reverse ‘damaging’ decision
The UK Government’s decision to introduce means testing for the Winter Fuel Payment must be reversed, according to MSPs.
Following a debate as part of Challenge Poverty Week, the Scottish Parliament voted in favour of a motion that the UK Government reverse its decision to restrict entitlement to the benefit. Labour MPs Richard Leonard and Alex Rowley supported the motion.
Fourteen Scottish Labour MSPs, including Edinburgh MSPs Sarah Boyack, Foysol Choudhury and Daniel Johnson, voted with their leader Anas Sarwar against the motion.
First Minister John Swinney said that as a result of this damaging decision, Scottish Government analysis indicates roughly 900,000 Scottish pensioners will no longer be entitled to support with heating costs this winter.
Commenting after the debate, the First Minister said: “More austerity is not the solution to the restrictive fiscal environment in which the UK Government, and governments across the globe, find themselves.
“It is a mistake to think that action to tackle poverty for our most vulnerable citizens are costs to be mitigated. These measures are investments in our people, our communities and our nation’s future. I have urged the UK Government to deliver an Autumn Budget that recognises this reality.
“Scotland’s Parliament has spoken, and I repeat my call for the UK Government to reverse its damaging decision to restrict entitlement to Winter Fuel Payments for pensioners.
“The Scottish Government will continue to support households with their energy bills and tackle fuel poverty. However the UK Government must ensure their budget in October provides the necessary support to those who need it most.”
CANTERBURY MP Rosie Duffield has resigned from the Labour Party, criticising Labour leader Sir Keir Starmer – now labelled Free Gear Keir – for accepting thousands of pounds worth of personal items while at the same time removing Winter Fuel Payments from thousands of struggling pensioners.
