Scottish Government Ends Winter Fuel Payments In Scotland For Most Recipients

15th August 2024

Plans to means-test Winter Fuel Payment in England and Wales will see the Scottish Government's funding cut by up to £160 million.

Social Justice Secretary Shirley-Anne Somerville has confirmed the Scottish Government therefore has no alternative but to replicate the decision in Scotland and restrict payments to pensioners who receive eligible benefits.

Social Justice Secretary Shirley-Anne Somerville said, "Despite all efforts to review our financial position we have been left with no choice but to follow the UK Government and restrict payments to older people who receive relevant eligible benefits.

"This is a necessary decision when faced with such a deep cut to our funding and in the most challenging financial circumstances since devolution. The reduction we are facing amounts to as much as 90% of the cost of Scotland's replacement benefit, the Pension Age Winter Heating Payment.

"Given the UK Government's decision to restrict payments to those in receipt of means-tested benefits, such as Pension Credit, and the implications for the Scottish Government detailed above, I have urged the Secretary of State for Work and Pensions to undertake a benefits take-up campaign for Pension Credit and to move forward with plans for a social energy tariff.

"Both of these measures will provide some further protection to energy customers in greatest need."

The UK Government's approach reduces the Block-Grant Adjustment associated with devolution of the UK's Winter Fuel Payment by an estimated £140-£160 million in 2024-25, nearly 90% of the cost of the Scottish Government’s new replacement benefit, Pension Age Winter Heating Payment.

The Scottish Government is in discussion with the Department for Work and Pensions which has committed to administer a payment equivalent to Winter Fuel Payment to older people in Scotland this winter.

The launch of the Scottish Government’s Pension Age Winter Heating Payment will be deferred to 2025-26. The timing of the UK Government announcement means it is not practicable for the Scottish Government to make these changes in 2045-25 at this late stage.

Initial analysis suggests that the caseload in Scotland will decrease by around 900,000 in 2024-25 based on current Pension Credit uptake, and will now provide support to up to 130,000 individuals in receipt of Pension Credit and other means-tested benefits.

Comment
The other aspect to this is that the Scottish economy will suffer as pensioners divert income to pay heating costs. Perhaps collectively about £180million will be withdrawn from other spending hitting many businesses in all places. Added to this change is the fact that energy prices are due to increase once again in October when the price cap changes.