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A pensions expert has predicted that Rachel Reeves and Labour will have to give all pensioners their winter fuel money back for one key reason. Rachel Vahey, head of public policy at AJ Bell, said that the only option for Sir Keir Starmer and his government was to reinstate the winter fuel payment for all pensioners.
The Prime Minister confirmed Labour had been forced into a humiliating climb-down over winter fuel paymentsat PMQs on Wednesday afternoon. Following reports of a possible U-turn, he told the House of Commons on that the policy will be changed and the Government would look at the threshold for the payments, which will mean more pensioners become eligible.
Ms Vahey said: “No sooner had the government wiped its feet on the doormat of Number 10 in July that it announced it was scrapping the winter fuel payment for all but the poorest of pensioners.
“This bold move caused outrage, but the government seemed oblivious to the many calls to reverse its stance, and instead pressed ahead with its plans to means test the payment last winter.
She added: “Ten months later, the furore hasn’t died down, instead being fanned by the flames of a shaky Labour showing in the local government elections.
Ms Vahey added that increasing the threshold for winter fuel payment elgibility would have to take the form of means testing, but this would ultimately be too expensive to adminster, meaning it was likely the WFP would be re-introduced for all pensioners.
She told the Express: “The payment of pension credit is a handy way of means testing the wealth of pensioners, and adopting any other higher benchmark would probably prove too administratively expensive. It may be the only route is to return to paying a universal benefit to every state pensioner. Such a U-turn would be embarrassing for Labour to stomach but may just save them some valuable public support.”
Ms Vahey also urged the government to “pause and take stock of all the benefits paid to pensioners”.
She said: “Successive governments have been keen to commit to the triple-lock guarantee, as well as kicking state pension age reviews into the long grass. But as the value of the state pension edges ever closer to the frozen personal allowance the government may finally be forced to address the question of how much the state supports pensioners, including the level of state pension, what age it should be paid, and how it should be increased sustainably each year.”
