Martin Lewis, a consumer advocate, has expressed his desire for the government to reconsider its intentions to restrict the winter heating allowance. He has stated that the conditions for providing assistance to pensioners are “far too narrow.”
Despite the fact that Lewis was generally in favour of the concept of eliminating universal benefits, he stated that the government had gone too far by only offering financial subsidies to the “absolutely poorest pensioners on the very lowest income.”
Rachel Reeves, the chancellor, disclosed last month that she intends to implement a means test for the winter fuel payment. According to her, the only people who would be eligible for the means test would be those who receive pension benefits. This is a part of an effort to fill what she described as a $22 billion gap in the public finances left there by the previous Conservative administration.
However, the move would result in a significant reduction in the number of retirees getting the payout, which would go from 11.4 million to 1.5 million. This would result in the government saving approximately £1.4 billion during this fiscal year.
According to Lewis, it would deprive an excessive number of retirees of the support that they desperately require. According to what he said on the Today show on BBC Radio 4, “Pension credit is a payment for those on an income of less than £12,600—that is very, very low.” I believe that the eligibility requirements are way too stringent, despite the fact that I genuinely agree with the idea that there is a very good reason for doing away with a universal winter fuel payment.
Rather than that, the founder of MoneySavingExpert said that the government should base its support on council tax bands, which are connected to the value of properties. His plans would restrict the winter heating allowance to only those households that fall into the A to D bands, which are the residences with the lowest net worth. According to Lewis, “That would expand eligibility beyond just those who are currently receiving pension credit.”
“I have to admit that it is not a perfect solution, but it is a solution that can be implemented quickly and is workable. I am scheduled to meet with Rachel Reeves in a couple of weeks to discuss a variety of issues, and I will definitely be presenting that idea to them for consideration.”
Similar to other countries, Scotland has decided to stop making payments. Reeves’ announcement was applicable to both England and Wales.
Lewis’s plan comes at a time when Ofgem, the energy regulator for Great Britain, has raised its cap on energy prices beginning in October. This action will result in a rise in the average annual energy bill for gas and electricity to a total of 1,717 pounds. In comparison to its current amount of £1,568, which has been in place since July, this represents an increase of £149.
Ofgem is responsible for establishing the price cap on a quarterly basis. This cap places a limit on the amount of money that suppliers are allowed to charge their 29 million residential customers for each unit of gas and electricity.
A reversal in the price of energy, according to Lewis, is quite unlikely. “I’m afraid to say that it is currently expected that on January 1st, it will climb again, but it will only rise modestly at that point in time. It is highly probable that by this time next year, we will still be paying a higher amount on the energy price cap than we are paying at the moment,” he further stated. As a result, these price increases are here to stay until there is a significant shift in the market.