Energy bills can be a burden when you’re earning a salary, let alone when you’re living on a pension. But not all pensions are the same. Take the £28 million pay-and-pension package recently awarded to one of the gas industry’s ‘fat cats’, for instance. Although at 56 this particular gentleman is not yet eligible for the Winter Fuel Payment, in four years time he will be.
The point is… should he (and all the other ‘fat cats’ out there) receive the same Winter Fuel Payment as my elderly neighbour who survives on a weekly state pension of just £97.6 and who struggles to pay his electricity and heating oil bills?
“No way!!!” I hear you shout. But of course that’s an extreme example.
Obviously if you are a pensioner struggling to survive on a state pension then winter fuel payments are vital to help towards your electricity, gas or heating oil. But many ‘ordinary’ pensioners still enjoy generous final salary schemes, so the additional money doesn’t make a great deal of difference to their lives.
So perhaps Winter Fuel Payments should be means tested, so poorer pensioners get more and wealthier pensioners get less – or nothing at all in the case of the ‘fat cats’.
But would the administrative costs involved eat up any savings? And would it mean yet more confusing form-filling for elderly people already bombarded with red tape? We’ve all heard stories of people failing to claim payments they are entitled to. I’d hate to think my neighbour was turning down his thermostat purely because bureaucracy had put him off claiming for a means tested Winter Fuel Payment.
Already, claiming Winter Fuel Payments isn’t as easy as you might think. There are several different amounts between £125 and £400, depending on when you were born, where you live and who you live with. Only people aged over 80 on or before 26th September 2010 qualify for the full amount, but only if they live alone.
So add means testing to this already confusing equation and there’s a real risk that people won’t claim who need it most.
And there’s always the argument that the state pension isn’t means tested – so why should we means test fuel payments?
Most single people above pensionable age who’ve paid the right National Insurance contributions are entitled to a state pension. This means even multi-millionaires receive it. Just like the Winter Fuel Payment.
So maybe pensions should be means tested too? Or is that what the new Government has up its sleeve anyway…