Up to 2 million financially struggling older people could lose annual payments worth hundreds of pounds under government plans to restrict the winter fuel allowance to the poorest pensioners, campaigners have warned.
Rachel Reeves announced the plans in a speech on Monday outlining a series of spending cuts to help fill what the government says is a £22bn “black hole” in the public finances.
Charities criticised the changes, which could save £1.5bn, warning people who fail to claim the main qualifying benefit, pension credit, could face “heat or eat” dilemmas this winter because they will lose eligibility for payments worth up to £300 a year.
The chancellor also scrapped long-delayed plans drawn up by previous Conservative administrations designed to protect individuals from having to sell their homes to meet large social care bills, saving £1bn a year by 2026.
Potentially millions of affluent pensioners will lose winter fuel payments of between £100 and £300 for each person, designed to help people aged 67 or over pay heating bills in the coldest months of the years. In the winter of 2022-23, some 11.4 million people received them, alongside extra one off cost of living payments of up to £300.
Caroline Abrahams, the charity director at Age UK, said: “Our initial estimate is that as many as 2 million pensioners who badly need the money to stay warm this winter will not receive it and will be in trouble as a result – yet at the other end of the spectrum well-off older people will scarcely notice the difference – a social injustice.”
She added: “Means-testing winter fuel payments this winter, with virtually no notice and no compensatory measures to protect poor and vulnerable pensioners, is the wrong policy decision, and one that will potentially jeopardise their health as well as their finances – the last thing they or the NHS needs.”
Age UK estimates 800,000 older people on very low incomes – under £218.25 a week for single pensioners and under £332.95 for couples – are eligible for but do not claim pension credit, which will be the main qualifying benefit for the winter fuel payments under the plans, and could lose out.
The decision to means test winter fuel payments – a universal benefit available to all state pensioners since 1997 – came as a surprise, with previous cost-cutting governments tending to shy away from a cut that might alienate older voters.
The Treasury said the payments will now be targeted at households over state pension age in England and Wales who are in receipt of pension credit and universal credit. Those eligible will receive £200, or £300 for those aged over 80. Winter fuel payments are devolved in Scotland and Northern Ireland.
“This will better target support for heating costs at those who need it, while all pensioners will benefit from the government’s commitment to maintain the triple lock for the basic and new state pension in this parliament,” a Treasury document outlining the chancellor’s plans said.
The government said it had decided to abandon the long-delayed social care charging reforms – known as the social care cap – because the Conservatives had failed to put aside money to pay for them. It said the cap would be impossible to deliver in full under previously announced timeframes.
The cap was adopted by the then prime minister Boris Johnson in 2021 to meet a 2019 manifesto promise that pensioners would not have to sell homes to fund care costs in old age. It raised the amount of assets a person can have before getting state funding for social care from £23,250 to £100,000 and capped lifetime care costs at £86,000.
A year later the Conservatives delayed the introduction of the cap until October 2025 amid funding concerns. These concerns have not been resolved, and last week local authorities warned pushing ahead with the cap without additional investment would push some councils into bankruptcy.
Martin Tett, the adult social care spokesperson for the County Councils Network, said failing to take forward the reforms in the current parliament “will be frustrating to campaigners”. But pushing ahead without proper funding would have “catastrophic consequences” for council finances and individuals who receive social care.
Thea Stein, the chief executive of the Nuffield Trust, said: “While the specific reforms scrapped today were only a partial solution, they were at least something – and the danger now is that social care remains in the long grass … we urgently need to move social care reform from being tomorrow’s aspiration to being today’s priority.”
