Category Archives: Winter Fuel Payments

Changes to pensioner benefits mooted during the general election now appear ‘in limbo’

Pensioners have been left in limbo by the hung parliament election result, with any proposed changes put on hold until a government is formed.

The Conservatives, who were expected to win a solid majority, wanted to scrap the Triple Lock which that the state pension would rise by whichever is the highest of inflation, wage growth or 2.5%, and replace it with a ‘Double Lock’ which would remove the 2.5% annual rise. Under a Conservative government, the state pension age would increase with life expectancy.

They also planned to means-test the Winter Fuel Allowance, which is worth up to £300 a year for older people to help with their heating costs. However, now that the party has failed to win a majority, they may find it difficult to proceed with any of these plans.

Triple Lock and Winter Fuel Allowance

The Conservatives are working towards doing a deal with Democratic Unionist Party (DUP) to form a government, who want to maintain both the Triple Lock and the Winter Fuel Allowance.
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The State Pension is taxed, why not The Winter Fuel Allowance?

We are surprised that subjecting pensioners to new means tests is being suggested for the Winter Fuel Allowance which may require an army of means testers. It would also subject many pensioners to a process that they feel very uncomfortable with. Our suggestion for a long time has been to make WFA subject to taxation in the same way as the State Pension is. We’ve never heard anyone complaining that the very wealthy enjoy the State Pension, so what is the problem with taxing Winter Fuel Allowance? The answer that many may give is that a lot of people will be affected by this, without necessarily being on a massive income. But at least the most needy would get the pension in full, and it would stop the continual bleating about this allowance being paid tax free.

An army of means testers needed ?

An army of means testers needed ?

taxed winter fuel cash to help social care crisis says Baroness

Baroness Altmann has claimed its “ridiculous” that affluent pensioners receive the benefit without a tax penalty – which could help fund social care

AN ex-Pensions Minister is calling for rich pensioners to be taxed on the winter fuel allowance.

Baroness Altmann says it is “ridiculous” they are not — and that the tax penalty could help fund social care.

The Sun on Sunday can reveal just 518 OAPs have declined the payment, which ranges from £100 to £300 and used to help pay heating bills in the winter months, since 2011.

Total government expenditure on it is around £2billion and it is paid to more than 12million pensioners.

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Our comment: this has been a recurring hot chestnut over recent years, but so far governments have not responded. Many people forget that the State Pension is taxed for those with sufficient income. We advocate an increase of 25% in the allowance which is then paid with state pension payments, which will be taxable. That way those that need it will get the full amount, and those on higher incomes will be taxed on it.

PM comes clean on minute cost of pensioner benefits – 0.7% compared to the savings due to raising pension age

Savings on raising state pension age compared to cost of Pensioner benefits

Savings on raising state pension age compared to cost of Pensioner benefits

In his speech yesterday the PM pointed to the comparative savings from raising the state pension age (£500,000,000,000) – the half a trillion he mentioned sounds a lot less – with the cost of retaining pensioner benefits i.e. Bus passes, Winter Fuel Allowance and Free TV Licences for over 75s which is estimated at £3,600,000,000 or 3.6 Billion which represents 0.7% of the state pension age being raised.

And those for those who now have to wait much longer for their state pension the loss of income is massive. Politicians would be wise to realise that those between the age of 60 and 65 are feeling the pain !

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Over-60s should be told to apply for winter fuel payments says “think” tank

Over-60s should be told to apply for winter fuel payments if they need the cash, an influential think tank has recommended.

It reckons better-off pensioners wouldn’t claim, allowing the benefit to be focused only on those households most in need.

The think tank calculates that savings for taxpayers could reach £400m a year, based on research showing that “74pc of people believed winter fuel allowance should only be available to those with incomes or savings below a certain level”.

Under its proposals the payments would continue to go automatically to those receiving pension credit, protecting pensioners on the lowest incomes.

In its Welfare Manifesto, published today, Policy Exchange said: “It would bring the payments in line with other parts of the welfare system, where eligible recipients have to make a conscious choice to receive them. Currently, the majority of these payments are made automatically, meaning that they are passively received.”

Our comment: Our concern would be that the less able/more needy would miss out. Then again Think Tanks don’t do a lot of sensitive thinking do they ?
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The perils of means testing pensioner benefits such as bus passes, winter fuel allowance & free TV Licences

The downside of means testing - beaurocracy gone mad
David Cameron today signalled that he will protect benefits for Britain’s wealthiest pensioners.

The Prime Minister insisted there were not big savings to be made from cutting winter fuel payments, TV licences and bus passes for the well-off.

It raises the prospect of the Tories being the only major party going into the election vowing to preserve the payments for all over-65s, while cutting welfare for people of working age.

“I’ve always said that there aren’t huge savings to be made from axing these benefits and I think pensioners welcome the clarity that there has been.”

Our comment:If he says so we suppose it must be true ?

The Lib Dems blocked any further welfare reform I the current coalition unless Mr Cameron agreed to axe the £2billion in benefits to the better off, including the winter fuel allowance, free bus passes and free TV licences.

Labour has said it will stop winter fuel payments to 600,000 pensioners on higher and top-rate tax.

The Institute for Fiscal Studies has warned taxpayers will have to find another £12billion by the end of the decade to pay for benefits for pensioners.

Shadow chancellor Ed Balls said today: ‘We have said we will have some difficult decisions to get the deficit down.

‘We would reverse the top rate income tax rate cuts which the Tories delivered for people earning over £150,000, but we’ve also said that we would have to take the winter allowance from the richest pensioners, pensioners with pensions over £42,000-a-year.

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pensioners contribute winter fuel allowances to keep bus service

When the 39A service between Hay-on-Wye and Hereford looked set for the chop local businesses and residents offered to fund it and the Hay Ho! bus was born
When penny-pinching local authority bosses scrapped subsidies on a local bus route it threatened to leave pensioners in a Welsh town cut off.

 The launch of Hay Ho! Bus servic

The launch of Hay Ho! Bus servic

So when a group was formed to save the service they stepped in – and handed over their winter fuel allowances to keep the service on the road.

Tourism businesses in Hay-on-Wye, Powys, feared they would lose trade if their public transport link to Hereford on Sundays ended so they decided to shoulder the financial risk themselves.

Facing an estimated £6,000 shortfall for one year of Sunday buses the Hay Tourism Group set up a supporters’ club for the route. It has been named the Hay Ho! bus to make it more appealing than the plain old 39A.

The group has been taken aback not only by the number of people who have already paid the club’s £5 subscription fee but also by pensioners offering winter fuel allowances.

“We’ve had about £1,700 pledged,” said Anna Heywood, secretary of Hay Tourism Group. “We’ve got 29 supporters signed up. Some people have pledged winter fuel allowances.
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Wealthy pensioners to keep bus passes and winter fuel payments under Tory government, David Cameron hints

Wealthy pensioners are likely to keep their benefits such as free bus passes, winter fuel allowance and cold weather payments should the Conservatives win the 2015 general election, after David Cameron said cutting them from top-rate taxpayers would only save a ‘tiny’ amount.

Speaking to Saga members in Peacehaven, near Brighton, East Sussex, Mr Cameron also outlined plans to increase the threshold for inheritance tax, saying only the rich should pay it.

He told the audience: “We will set our policy for the next Parliament at the next election. I don’t want to pre-judge that. But the only thing I would say is that people think you save lots of money by not giving these benefits to upper-rate, top-rate taxpayers.

“You save a tiny amount of money and you always introduce another complexity into the system. We made our promises for this Parliament, we kept our promises, I’m proud of that.”

Mr Cameron also suggested he would propose in the next manifesto to raise the inheritance tax threshold, saying it should only be paid by the rich.

Passing money down to their families helped contribute towards “a stronger society” and people should not be hit by inheritance tax where they have worked hard and saved.

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How rich people even get a better deal from the state pension

It seems the Conservatives cannot wait to betray their most loyal voting group. If you are a pensioner – beware!

As trailed on Vox Political last November, the Department for Work and Pensions appears to be planning to delete the cold weather payment from its chequebook, along with free bus passes and free TV licences.

We already know that the age at which the state pension will be paid is rising, meaning people will have to continue working for longer before they qualify for the £144/week payment (with a minimum National Insurance record of 30 full years). This is a betrayal of promises made by both the Conservatives and the Liberal Democrats in their document ‘The Coalition: Our Programme for Government’.

Because life expectancy depends on where you live and your social class, this means many poorer people will enjoy only three-to-six years of retirement on average, while richer pensioners get 17-20 years of pension payments. That’s right – rich people even get a better deal from the state pension.

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IDS plans to scrap free bus passes and winter fuel allowance

Iain Duncan Smith’s move flies in the face of David Cameron’s election pledge to rule out cuts to pensioner ­benefits
Iain Duncan Smith tonight stepped up the Tory war on the poor by turning his sights on society’s most vulnerable.

The penny-pinching Work and Pensions Secretary wants to slash winter fuel allowances for pensioners and scrap their free bus passes and TV licences in a move that would spell misery for millions of people.

His cruel cuts could mean OAPs having to choose between heating their homes or eating as they lose up to £300 in cold weather payments.

And the over-75s would also have to fork out £145 for TV licences.

Mr Duncan Smith’s move finally destroyed any claim the party had to being caring Conservatives.

And it flies in the face of David Cameron’s election pledge to rule out cuts to pensioner ­benefits.

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Our comment: Can’t help thinking there will be a few more rounds in this fight within the Government, no doubt influenced by the forthcoming election.

Suddenly pensioners matter again

One of the standards by which any society measures its decency is its generosity towards the old. The Prime Minister, David Cameron, harped on this theme at the weekend, announcing that pensions would rise by at least 2.5 per cent a year over the next parliament if he were re-elected in 2015. “In a civilised society, knowing you’re going to have a decent state pension is a really powerful thing,” he said.

A whiff of political calculation naturally accompanies the Prime Minister’s moral fervour concerning the need to grant people “dignity and security in their old age”. With the next general election less than a year-and-a-half away and with the Conservatives still lagging behind Labour in the polls – although by a smaller margin than a few months ago – Mr Cameron’s strategists are urging him to hunt down the one in three people who voted Conservative in 2010 but who do not plan to do so in 2015, according to the most recent polls.
The importance of pensioners as a voting bloc, meanwhile, has increased with every election, as the number of pensioners continues to rise both absolutely and proportionally. Already, 10 million Britons, or one in six of the population, are over the age of 65, while that number is expected to reach 19 million, or about one in four, by 2050. Back in 1908, when Britain introduced pensions, only half a million people were deemed eligible to receive them, although the age threshold, admittedly, was then set at 70.

Political strategists are also aware that pensioners also vote more than other age groups. In the 2010 election, 76 per cent of over-65s cast votes, compared with only 44 per cent of those aged 18 to 24.
Pension protection doesn’t go far enough – The Independent

And according to The Times today thr Prime Minister “is minded to renew the commitment he made in the TV debates in 2010 to ensure that all pensioners receive a host of benefits regardless of their wealth and despite Cabinet opposition.”

We wouldn’t like to be smug but a year on with an election a lot nearer, our comment in January 2013 was:
“It seems that promises made at the last election by David Cameron is playing a major role in preventing withdrawal of a number of ‘universal pensioner benefits’ at the present time. This will be an interesting issue at the next election – on the one hand politicians may wish to be very careful what they promise, but on the other politicians may not be able to ignore the fact that in 2015 there are expected to be 12.8 million people aged 65 and over, i.e approx 25% of the people at voting age – a very powerful group.”

Grandmothers back means test for winter fuel cash

Grandmothers have thrown their weight behind moves to means-test winter fuel payments and other pensioner benefits.

Almost 75 per cent of the members of the Gransnet online forum believe that the winter fuel payment of at least £200 should be stripped from the wealthiest older people, while more than 66 per cent believe that free television licences should be means-tested.
means testing pensioners benefits v3

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read more on Gransnet

Our comment: Means testing will be costly to implement, we’ve advocated paying the winter fuel as aprt of the State pension, which is taxed. It would mean those who have lower incomes get the payment in full.