Can you keep your winter fuel payment? Here’s who is eligible

Millions of pensioners were dealt a blow as the chancellor confirmed that only the poorest would get help covering the cost of their energy bills this winter.

Winter fuel payments, which are worth up to £300, will now only be available for those on pension credit or other benefits, Rachel Reeves said yesterday.

It means that millions of people will no longer get the handout as the cold weather sets in.

The number of households eligible for the payment is expected to fall to 1.3 million this winter, saving the Treasury £1.4 billion. About 8.4 million households got the payment in 2022-23.

The benefit is paid automatically to most people over state pension age in England and Wales. The winter fuel payment is devolved in Scotland and Northern Ireland so residents will not be affected yet, although the Scottish public finance minister, Ivan McKee, said the universal payment could not be guaranteed after the announcement.

But many people may not realise they are eligible to receive pension credit and could therefore keep the winter fuel payment.

So what is pension credit and how can you make sure you get it?

Pension credit is a benefit that aims to help cover your living costs if you are over state pension age and have a low income. The average pension credit payment is about £75 a week — equivalent to about £3,900 year.

You can normally claim if you have an income of less than £218.15 a week if you are single or a joint income of less than £332.95 if you are in a couple. Pension credit will then normally top up your income to this threshold.

For example, a single person over state pension age with an income of £200 a week could get £18.15 a week. However, you could be entitled to more, for example if you are a carer, disabled or have certain housing costs such as ground rent.

Money you get from working or the state pension, private pensions and some social security payments such as carer’s allowance, counts towards your income. Other benefits such as child benefit do not. For every £500 you have in savings over £10,000 you lose £1 of your entitlement to pension credit.

Hundreds of thousands of families are thought to be missing out on pension credit.

About 1.37 million people were claiming pension credit last year. The government estimates that as many as 880,000 families that were entitled to pension credit did not claim in 2022. These people are estimated to be losing out on £2,200 a year on average.

Steve Webb, a former pensions minister and a partner at the consultancy Lane Clark and Peacock, said: “I would encourage anyone on a tight budget to consider applying for pension credit. The best thing to do is put in an application and let the Department for Work and Pensions do all the sums for you to work out if you are entitled.”

Applying for pension credit if you are eligible is important because it can open the door to other payments. For example, if you are over 75 and entitled to pension credit, you could get a free TV licence, which usually costs £169.50 a year. You may also qualify for the warm home discount scheme, which gets you money off your energy bill, or a discount on your council tax.

You can check whether you are entitled to pension credit and how much you are owed by using the government’s online calculator. You will need to provide your date of birth, whether you live with anyone and your household income.

The charity Age UK can help you to work out what financial support you are entitled to via its free advice helpline on 0800 169 6565.

You can make a claim for pension credit through the gov.uk website or by phoning 0800 99 1234. You can apply for pension credit from four months before you reach state pension age.

Reeves has said the government plans to combine the administration of pension credit and housing benefit. This could mean that anyone claiming housing benefit would automatically get pension credit too. However, it is not yet clear when this system will be up and running.

It’s a good idea to apply for pension credit as soon as possible. Winter fuel payments are typically made in November or December and the government normally decides who is eligible based on their circumstances in September.