Surviving winter without the Fuel Payment: 5 money-saving tips for pensioners

The Winter Fuel Payment remains a vital support for many pensioners during the cold months. While energy costs continue to challenge household budgets, there are several ways to manage your winter expenses effectively. Here's what you need to know about available support and practical money-saving strategies.

Understanding the Winter Fuel Payment

What is it?

The Winter Fuel Payment is the government's way of helping older folks keep warm when the mercury drops. It's a yearly cash amount that goes straight into your bank account. Most payments are made automatically in November or December.

Who gets it?

Traditionally, it's been a winter treat for most UK residents born before a certain date. For the 2024/2025 winter, that date is 25 September 1958. If you're over State Pension age, you're likely in the club.

What's changed?

Here's where things get a bit frosty. The government's decided to tighten its belt. From winter 2024, the Winter Fuel Payment will only be dished out to the least well-off pensioners. It's no longer a blanket handout for all, regardless of their bank balance. During the winter of 2023/2024, 10.8 million pensioners across 7.6 million households in England and Wales received the Winter Fuel Payment. For the upcoming winter of 2024/2025, the Department for Work and Pensions (DWP) projects that 1.5 million individuals in 1.3 million households in these regions will receive the payment.

How much will it be?

Payments range from £250 to £300, depending on your circumstances and whether you qualify for the additional Pensioner Cost of Living Payment. Those living alone or receiving certain benefits typically receive higher amounts.

Five Essential Money-Saving Strategies

Check whether you qualify for pension tax credit

Pension Credit gives you extra money to help with your living costs if you’re over State Pension age and on a low income. It can also help with various expenses, such as the TV license, service charges, or dental treatment.

Pension Credit tops up your weekly income to £218.15 if you’re single and your joint weekly income to £332.95 if you have a partner. You may still get support on a higher income if you have a disability, care for someone, are responsible for children or young people, have housing costs, or have savings or a second pension.

Making a claim is relatively straightforward, but many eligible pensioners don’t take it up. Up to 880,000 eligible households were not claiming Pension Credit worth on average of £3,900 a year.[3] You can get more details here.

Manage your fuel costs

The scrapping of the Winter Fuel Payment unfortunately coincides with a rise of 10% in the price cap for fuel. However, there are differences between providers and you may be able to get a better deal than your current one. While ferreting about on price comparison sites may be your idea of hell, it is exactly this kind of task that grandchildren are made for.

Below are some comparison sites that are approved by Ofgem:

• Energylinx

• The Energy Shop

• Money Supermarket

• My Utility Genius

• Simply Switch

• Switch Gas and Electric

• Quotezone

• Unravel It

• Uswitch

Shifting providers is straightforward – you won’t even know it’s happening. There are even programs you can use that automatically switch you to the best-priced provider at any given time. This is worth looking at and can save you the cost of the Winter Fuel Payment all by itself.

Insulate like mad

The obvious way to combat the loss of the Winter Fuel Payment is to use less fuel. By this, we certainly don’t mean that you should sit around in a coat, but finding ways to save electricity and heating costs is a no brainer. For example, Anglian Home estimates that turning off appliances rather than leaving them on standby saves around £65 a year, while drying your clothes on a washing line instead of tumble drying can save £70 a year[1].

There are also a range of low cost insulation techniques, such as adding covers to keyholes and letterboxes, putting draught excluders at the bottom of doors, sealing any obvious cracks and using sealant strips on windows. There are also more expensive, but effective options such as loft insulation.

There are a range of government schemes to help you upgrade your home. For example, there is a boiler upgrade scheme, the Home Upgrade Grant and the Great British Insulation Scheme. There is a list of additional schemes here so you can check what you are eligible for.

Remember that the State Pension will rise

The State Pension is due to rise from April. The rise means that those qualifying for a full new State Pension can now receive £221.20 a week (up from £203.85). This should help you replenish any additional heating costs next year. Note, this is the ‘new State Pension’. Those on the old State Pension will be starting from a lower base, and will only see a rise to £169.50 – up from £156.20.

Check your savings

If you have savings, could they be working harder for you? For example, if you have money in a cash savings account paying low rates of interest, could you switch to a higher paying option? Switching is easy and, again, tech-savvy family members may be able to do the legwork for you. If you have cash savings that sit outside an ISA wrapper, it may be worth putting them in an ISA. This will mean you don’t pay tax on the interest you generate and may save you 20% of your income.

Another option is to buy a shorter-dated government bond. With government bonds, you lend the government a set amount of money for a specific period of time. The government pays you interest at regular periods and your money back at the end of the term. Interest rates are attractive and you can buy government bonds through investment platforms of the HM Debt Management Office.

Additional Support Available

Energy Company Support

Many energy suppliers offer:

• Priority Services Register for extra support

• Special payment plans for pensioners

• Free boiler checks and energy efficiency advice

Local Authority Help

Your council may provide:

• Household Support Fund payments

• Local welfare assistance

• Home improvement grants

Charitable Support

Organisations like Age UK and Turn2Us can:

• Provide benefit checks

• Offer energy efficiency advice

• Help with grant applications

The loss of the Winter Fuel Payment is regrettable, but there are ways to mitigate its impact. In the long-run, it may save you even more.
_________________________________________________

[1] Anglia Home

[2] Commons Library, September 2024

[3] Gov.UK, August 2024