Spike in Pension Credit Claims Following Changes to Winter Fuel Payments

The Department for Work and Pensions (DWP) has reported a significant increase in claims for Pension Credit following the recent announcement regarding changes to the Winter Fuel Payment scheme.

Typically, the DWP received between 3,000 and 4,000 claims weekly. However, after Labour‘s announcement on July 29, claims surged to between 8,000 and 9,000 per week.

In the five weeks following the overhaul of the Winter Fuel Payment, the DWP recorded 38,500 claims for Pension Credit. This figure reflects a remarkable 115% increase compared to the 17,900 claims made during the preceding five weeks.

At the end of July, as part of Labour’s public spending audit titled “Fixing the Foundations,” Chancellor Rachel Reeves confirmed that the Government would impose stricter eligibility criteria for the Winter Fuel Payment, which provides up to £300 during winter for heating expenses.

Only individuals receiving Pension Credit, Universal Credit, Income Support, income-related Employment and Support Allowance, or Jobseeker’s Allowance would qualify for the forthcoming payment, leading to criticism from various charities and organizations.

Concerns were raised that up to ten million individuals, including two million who are currently facing financial difficulties, would be excluded from previously universal benefits designed to assist older adults with heating costs.

Steve Webb, a partner at LCP and former pensions minister, indicated that the changes could motivate more individuals to apply for Pension Credit. This is reminiscent of when BBC‘s free TV license for individuals over the age of 75 was restricted to those on the benefit, resulting in a surge of applications.

Rachel Vahey, head of public policy at AJ Bell, stated that the Government’s decision to remove the universal Winter Fuel Payment has encouraged many pensioners to quickly file for Pension Credit benefits.

Vahey noted that only six out of ten eligible individuals typically apply for Pension Credit, which can lead to significant financial losses for those on lower incomes. Many are rushing to complete their applications to retain the £300 Winter Fuel Payment while also potentially qualifying for additional benefits, including assistance with dental treatment and free TV licenses for those over 75.

Moreover, the Government is facing increasing pressure from opposition groups, unions, and its own backbenchers to reverse its controversial decision regarding the Winter Fuel Payment.

Additionally, the results for average earnings growth for July are expected to be released soon. These figures may impact the increase in state pensions for the following year in accordance with the triple lock guarantee.

Pension Credit remains an essential benefit that is frequently unclaimed by lower-income retirees. For the 2024/25 period, individuals over the state pension age of 66, with a weekly income below £218.15, can receive Pension Credit, which will raise their income to that level. For couples, the income limit is set at £332.95.

Income that counts towards this calculation includes state pensions, other pension schemes, earnings from employment or self-employment, and most social security benefits. It is the responsibility of the individual to apply for Pension Credit.

The process of claiming Pension Credit also provides access to other benefits, such as support for heating costs, housing benefits, dental care, and free TV licenses for individuals aged 75 and older. Vahey pointed out that the end of universal Winter Fuel Payments now means it also becomes a gateway to the means-tested Winter Fuel Payment.