General Chat

Winter fuel payment curbs risk breaking election pledge

Joe Murphy, Political Editor (from London Evening Standard)
17.08.10


Winter Fuel Payment

Winter fuel payments for the elderly and universal child benefit were thrust into the firing line for spending cuts today.

Welfare Secretary Iain Duncan Smith is looking at slashing the number of people entitled to claim — creating a headache for David Cameron who gave a firm election promise on live television to protect pensioners' help with heating bills in cold weather.

Among the options for cuts are restricting fuel help to older people, which would save some £2.7 billion towards a Treasury target of an extra £11 billion of cuts from the benefits bill.

The department is also considering axing child benefit payments to better off families, which would save £5 billion.

In a live TV debate before the election, Mr Cameron dismissed as “pure lies” Labour claims that the Tories would cut free bus passes and free TV licences for pensioners and the Winter Fuel Allowance.

The Coalition agreement between Mr Cameron and Liberal Democrat leader Nick Clegg also promised “to protect key benefits for older people” including the winter fuel allowance — but failed to rule out raising the age when people can claim or restricting claims to the poorest.

One option could be to raise the age from 60 to 75, in line with free TV licences, or axe it for higher-rate taxpayers.

Mr Clegg is said to be backing Mr Duncan Smith in a battle against Chancellor George Osborne, who wants cuts to be found in current welfare spending before he will sanction plans for wider reforms that could cost extra money in the short term.

The proposal to cut benefits such as winter fuel help emerged during the exchanges of letters between welfare ministers and the Treasury.

Sources in both the department and the Treasury would not deny that the cuts were being looked at but described reports as “speculation about the comprehensive spending review”.

Mr Osborne today said the welfare bill was “completely out of control” and the deficit could not be tackled without cutting spending on benefits.

“I think it is a fundamentally unfair system we have in our society at the moment, that we have such a complex system of benefits that trap people in deep poverty and make it very difficult for people to get into work,” he said.

Mr Osborne added that ministers were engaged “in a collective effort” to improve the system.

Shadow chancellor Alistair Darling said: “There's nothing fair' or progressive' about hitting the poorest.”




I saw something on tv earlier that says the winter fuel payments will be for over 66 year olds, not sure if that was just another suggestion or decided on, but one way or another some pensioners will lose out I think.

This government doesn't seem to care for the elderly or poorer more vulnerable people, or poor familes with children.

Lizx

Hi Liz,
I heard this on the tv tonight, maybe they should start with stopping paying the winter fuel payment to all the people that have decided to move abroad to the sunshine, I think that the goverment might save a lot of money, I can understand these people being able to claim their pensions but why should the be able to get any extras.

lynn x

Hi Lynn

If the fuel payment was stopped for those who didn't need it, people who have more money than they know what to do with, then there would be enough for those who don't have enough to stay warm and well fed during the bad weather. Or perhaps it's a ploy to get rid of lots of the elderly before they cost any more? Freeze or starve them to death, after all, with extra vat there will be hardly any money to spare.
The amount the government says a single pensioner needs to live on is £132.60 I think at the mo, don't they mean exist?

I am so unhappy with the way this government are treating people, and it's going to get worse before it gets better, methinks.

take care
Lizx

I agree Liz,
I collect my first winter fuel payment this year I have already filled in the forms, but if these people can afford to pack up and move abroad and wher its farley warm and their not putting anything into the country why should they they these payments.

lynn

Here's an updated report! Maybe it's to be phased in so things will stay the same for those already in receipt of help.


Winter fuel payment cuts to hit millions of pensioners
Older people will have to wait at least six years longer to receive winter fuel payments, under government plans to cut the welfare bill.

By James Kirkup, Political Correspondent
Published: 10:55PM BST 17 Aug 2010

The Daily Telegraph has learnt that ministers have resolved to increase the qualifying age for the annual payment from 60 to at least 66. Talks are under way about an even bigger rise.

The basic winter fuel payment, made to more than 12 million people, will also be cut by £50 for new recipients and £100 for the oldest.

It would be the first major restriction in a universal benefit under the Coalition, and could open the door to more dramatic announcements, with cuts to child benefit also under discussion.

The move comes despite a pre-election promise from David Cameron to safeguard benefits for the elderly, including winter fuel payments.

Earlier this month, the Government published plans to raise the state pension age for women to 66 by 2019.

Although there is no formal link between the retirement age and fuel payments, Whitehall sources confirmed that eligibility would follow the pension age upwards.

Liberal Democrat ministers, led by Nick Clegg, are pushing for the qualifying age to go even higher.

Some suggest that, ultimately, only those aged 75 and over should receive winter fuel payments. That would bring the benefit in line with free television licences.

Last winter, any household with someone aged 60 or more received a £250 winter fuel payment. For those over 80, it rose to £400.

Those rates were increased by Gordon Brown in 2008, by £50 and £100 respectively.

Mr Brown’s “bonus” cost the Treasury an extra £600 million, and pushed the total cost of winter fuel payments to £2.7 billion last year.

Treasury spending plans for this year are based on an assumption that the £600  million top-up is scrapped.

Critics of the payments say they are unfair because well-off pensioners receive the same as the poorest.

Whitehall talks are focused on how to cut the cost without breaking promises on winter fuel payments.

During the general election campaign, Mr Cameron said that the payments, along with free eye tests and bus passes for older people, would stay in place under a Conservative government. In a televised leaders’ debate in Bristol, he promised: “We will keep the free television licence, we will keep the pension credit, we’ll keep the winter fuel allowance, we’ll keep the free bus pass.”

By contrast, the Lib Dems campaigned on a promise to increase the qualifying age immediately.

As a compromise, the Coalition agreement promised that those benefits would be “protected” but did not give any specific details of what that meant.

The ambiguity in the commitment led some ministers to propose raising the qualifying age for free bus passes to save money.

George Osborne, the Chancellor, said yesterday that the Coalition’s welfare cuts would be “progressive”.

“We are engaged as a Government in a collective effort to get this right to both make savings to the welfare bill and to create a simpler, fairer welfare system that, above all, gets people into work,” he told BBC Radio 4.

At a question-and-answer session in the City of London later in the day, he repeatedly refused to rule out curbing entitlements to universal benefits.

Ministers have ruled out means-testing child benefit, but officials believe that it could be cut by reducing payments for second and subsequent children, or lowering the age when payments stop.

Government sources said last night that “all options are on the table”.

“We have to make some very unpleasant decisions, but we have to make sure they are done in the fairest possible way,” a source said.


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Joan, I know you always seem to miss out, don't you? So unfair.

I am not sure that I agree with the comment about British people living abroad should not recieve the Winter fuel allowance. After all if they have contributed whilst living in the UK by working all their lives why should they loose a benefit? Surley not becuase of a home address. My husband was emoloyed continually for from the age of 16yrs until he reached the the age of retirenment from the civil service. He was asked if he would retire early as he would not recieve an improved civil service pension for working any more time and also they were looking to cut the numbers in the service he was in. He was not desk bound and often worked under very dangerous conditions. He has not yet reached the age of having an OAP.
i however have reached this age and having worked continuosly since the age of 18 I am receiving a reasonable pension,and many of you will know that I have been asked many times to come back to the UK to work with elderly people.

The main problem as I see it is that the planning for the pensions has not been addressed by most governent members for many years and of course the number of people entitled to receive a pension has increased beyond expectations due in a great part to our laws allowing people who have not made the same input as most to recieve amazing amount of benifits, unlike the rest of the world where there are greater checks and controls. I could tell of truly amazing finds by my husband and his team when he was working but I would most like be banned from the site!

enough now from me

I am off to work again

bridget

The question of winter fuel payments to people living abroad comes up with amazing regularity & I would like to set a few records straight.
To qualify for the payment, you have to have been eligible for it before you leave the country.
Many pensioners who live in non EU countries get no annual increase to their pensions.
Those who live in the Eurozone have seen their pensions/investments shrink by more than 30p/c due to the strong euro, while inflation continues to rise.
We do have winter here!!. In many parts of Spain for example the temperatures drop to below 0c for weeks at a time. The first snow falls in November & lasts until April.Fuel bills treble in those 6 months,averaging over the year around €100 per month. The houses are not insulated & it´s not possible to insulate them because of the construction. There is no central heating & the floors generally are tiled so keeping warm is a constant battle.
We don´t spend the winter months sitting on a terrace with a G& T in our hands.
We are not eligible for pension credits or any other form of help, no matter how many years we have paid into the system.Nor are we all property tycoons. Out of a combined pension of €1100 per month, we personally pay €650 in rent & a further €200 in bills. What´s left has to feed & clothe us.Any shortfall has to come from savings, which I estimate wil run out in about 5 years at this rate.
Perhaps we should move back to England & claim the lot.

Clegg was on Breakfast Nest today and stated that no decision had been made nor would it until the spending review has been completed in a couple of months, so this is all pure speculation at the moment. He was critical of the press for spreading rumours.

Incidentally the qualifying age for Winter Fuel Payments for both men and women is rising in line with the increase in women’s State Pension age. This change was introduced by the last government, not this one.

To have reached the qualifying age for a Winter Fuel Payment for winter 2010/11 you will need to be born on or before 5 July 1950 to meet the qualifying date of 26th September. Those who reached 60 after the 5th July will have to wait for another year.

Similar rules apply to other age related benefits such as free bus passes, women's pensions and free prescriptions. Since April this year the qualifying age goes up by two months for each month that passes.

I will be 60 next year, and what this means for me is that I won't qualify until 2012, when I will be nearly 61. So for us, WFA will only be paid from 2012/13. My wife who is 58 this year won't qualify for her age related benefits until 2015, when she will be well over 62.

No extra benefits over and above basic pension should be paid to anyone who chooses to live abroad and not pay UK taxes. It is not a right, you have not paid into a pot for the future as all payments have to be met from current taxes.

WFA costs £2.7 billion, or in other words, over £40 in taxes per each man woman and child in the country, so it is not an insignificant amount.

Pardon me for asking, but where did I pay my tax & insurance to for 42 years.
I too had to wait until the statutary retirement age which was in force at the time. In fact I had my occupational pension reduced by 20 0/0 because I chose to leave at my statutory retirement age & not stay on for a further five years
As for the Winter fuel Allowance being geared to the weather conditions in England, surely that only applies to the extra payment made when the temperatures drop below a certain level. That is never paid to anyone living abroad, no matter how bad the weather.
Like it or not, we are members of the EU & therefore entitled to live where we choose within the Union (just the same as Immigrants to England from other EU countries.)
If all the ex pats came back as well & started claiming pension credits,bus passes, medical treatment, housing benefit etc, I think the UK would soon feel the pinch.
It´s cheaper to pay us 250 pounds per year to stay where we are.

No. I was actually pointing out how much it would cost the country if we did all come back.
From what you say, I should leave my husband & come back to England if I want to claim what I´m entitled to by paying into the system for 40 odd years.
Or perhaps I should bring him with me, then he, who has not paid a penny into the British system, would be entitled to everything I get.

It is only people who move to EU countries who get it Rita, non EU countries they don't qualify. That is because we are considered one member state!

What you say about the cost of living was certainly true up to about 5 years ago, but now it´s at least equal to the UK & for some things, higher.
That, coupled with a huge drop in the exchange rate & low bank interest means that people who moved to Spain (can´t speak for other EU countries) now are struggling to make ends meet.
Yes, my husband is Spanish & has another 5 years before he can collect his pension. He has been without work now for 3 years & at his age, has no hope of finding any. There´s no work for young people let alone over 60s. He gets nothing from the state other than €400 per month. We are living almost entirely on my small pension & drawing on the small savings we have.
I´m not complaining. Things are as they are & all we can do is hope that the situation improves before the savings run out. I´m just pointing out that the Winter Fuel payment is an entitlement, not a benefit,for people who have qualified & that our fuel bills double in the winter the same as anywhere else. As I said earlier,electricity bills average out at €100 per month, taken over the year.
Perhaps if you are so against people living in Spain & getting fuel payments, you could give some thought to the ones (&I personally know many) who are under pension age & come here with their families, claim child benefit & income support which is paid into their banks in England & drawn here, then go back 2 or 3 times a year to re register, while at the same time are holding out their hands to the charities here for rent money & food.
That´s my idea of unfair.

Just a small point.
Not all British pensioners living in other EU countries recieve the Winter Fuel payment. They have to have satisfied the eligibility conditions BEFORE they leave the UK.
I know more people who don´t get it than those who do.

Whilst the amount of pension you receive is based on the number of years of NI contributions, any payments or contributions you have made in the past as Tax or NI have already been spent and you are not 'entitled' to any of that money. Pensions and benefits paid this year have to come out of revenue raised by the government this year.

It just so happens that age entitlement to WFA is based on the same rules as used to calculate when you can receive a pension, free prescription, bus pass etc.

Payments of benefits to ex-pats will always be a hot potato, especially if they are not paying anything into the UK government coffers. The argument being "Why should I pay tax I already can't afford to someone who chooses to live abroad?"

Personally I believe that UK Government pensions should be paid based at the point that someone chooses to live abroad, but there should be no further entitlement age related or other benefits.

Keep it quiet, but free prescriptions slipped through the net, you still get them at 60 - not your new pension age! You can also get the Railcard reduction.

My Oh was also surprised to be able to claim back a few weeks worth of money back from his prepaid prescription.

I am just sitting back and watching this....
What really gets me is the fact that the memories of the people are so, so short!

Is all this REALLY surprising you?

Deanna X

Presumably during the 40 odd years I worked & paid taxes, my money was supporting someone who was retired or not working for whatever reason.
In common with all pensioners, it´s my turn to recieved a pension now, albeit funded by someone else. This is the way the government has chosen to fund old age.
In the end, we are all powerless to change anything. The government will do as it thinks fit & we have no choice but to accept it.
So it seems that however valid the points for & against may be, the discussion is futile.

Interesting discussions here.

I think the amount the pension increases at 80 is scandalous, 25p, it must cost more than that to alter the payout and such and definitely more to send out notification to you Rita.

I know it's been done by people for documentaries but in truth, no mp would manage to live week after week on the small amount pensioners get. I haven't seen the latest figures but I think I am right in saying our state pensions are the lowest around. Maybe we should lobby for all pensioners in the EU to receive the same amount of money, then ours might go up a bit, as I think there were other countries handing out lots more than here.

Lizx

This info is from November 2007:


Britons have worst state pension in EU
Last updated at 22:52pm on 12.11.07

Millions of Britons are being condemned to poverty in old age by the worst state pension in the EU, a study shows.

The basic state pension of £87.30 a week is equivalent to just 17 per cent of the average wage, it found.

This figure rises to 30 per cent once pension payments related to earnings are taken into account.

But this is still only half the EU average of 60 per cent, the financial firm Aon Consulting said. Its study concluded: "The inadequacy of the state system is beyond question."

Charities including Help the Aged warn the problem has been made worse because the state pension has failed to keep pace with increases in the cost of essentials such as heating, water, and council tax.

A recent study found a quarter of pensioners are having to cut back on basics to survive. Until recently many British workers could rely on private pensions such as final salary schemes.

However, many of the most generous schemes have been replaced by deals requiring higher monthly payments in return for a smaller pension.

In addition, the study said a "spate" of banking scandals and crises had damaged confidence in the private pension system.

As a result, Britons are not investing in private pensions on the scale needed to make up for the state system's failings.

The average age of retirement in Britain - 62.6 - is also above the EU average of 61. Some 57 per cent of Britons aged between 55 and 64 are in paid employment.

Aon found the value of Britain's state pension for a single person is 30.8 per cent of the average wage. This figure is 32.5 per cent in Ireland, 39.9 per cent in Germany and 51.2 per cent in France.

The most generous state pension is offered by Greece, where the figure is 95.7 per cent.

Aon said Britain's ageing population is reliant on young immigrants to boost the number of workers, generating taxes to fund pensions.

But it stressed this was not a longterm solution to the pensions crisis.

The firm's chief actuary, Donald Duval, said: "Migrant workers have helped boost the pension pot in the UK to mitigate against its demomeal-graphic problems but this is not a sustainable measure. It is a smokescreen hiding deeper issues facing the pension system.

"More needs to be done to restore confidence in private schemes so as to drive an increased level of contributions. People cannot afford to rely on the state pension, which remains the lowest in Europe.

"The 2005 Turner Report on the future of pensions concluded that the ageing population left the UK with four choices: lower pensions, higher retirement ages, higher member contributions or higher taxes.

"Assuming that the first is unacceptable, some combination of the latter three needs to be encouraged."

A spokesman for Help the Aged said: "Pensioners are resorting to strategies such as buying cut-price food that is nearly out of date.

"Increasingly the poorest pensioners are turning to friends and family to help them out.

"Debt agencies are also reporting an increase in the number of older people who have borrowed money they can't repay.

"Simple things like going out for a meal or inviting people to your home become impossible. Holidays are completely out of the question, while people have to cut back on hobbies and social events."

The Government plans to restore a link between rises in earnings and rises in the basic pension by 2012.

However, this will be part of a package that will also raise the retirement age from 65 in 2024 to 68 by 2050.

• The Government should ignore some of the money pensioners receive from private schemes to encourage more Britons to save towards their retirement, a report suggests.

The Pensions Policy Institute said many are afraid to invest in private schemes because they would lose means-tested state benefits.

The research charity suggested the Government should therefore disregard the first £12 a week someone receives from a private pension when calculating their state benefits.

This would allow someone to have a pension fund worth £6,000 before it affected their means-tested benefits.

I also found this from 2007 - just look at the comparisons:


Last Updated: Tuesday, 13 November 2007, 09:10 GMT



State pension 'worst in Europe'

The report highlights the challenge posed by an ageing population
The UK's state pension system has been named as the worst in the European Union for the second year running in a survey by Aon Consulting.

British pensioners receive a pension equivalent to just 17% of average earnings, the lowest level in Europe, and well below the average of 57%.

Aon says the "inadequacy" of the UK's state system is "beyond question".

The government says reform is already underway to make the state pension simpler, fairer and more generous.