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Wealthy pensioners refusing to give back winter fuel benefit

The number of retirees returning winter fuel payments to the government has fallen 78 percent as even wealthier retirees grapple with the cost-of-living crisis.

Just 186 retirees opted out of the winter fuel payment in fiscal 2021-22 out of more than 11 million recipients, down from 846 last year, according to a Freedom of Information request by this newspaper.

Just one in 60,000 over-65s declined to pay last year, even though one in five in that age group was classified as a millionaire, according to the Office for National Statistics.

All persons of retirement age receive the state benefit regardless of their financial situation. Wealthy businessmen and celebrities have previously criticized the system, including Lord Sugar and Peter Stringfellow, claiming it’s difficult to opt out of payments. Both have donated the benefit to charity in the past.

Those over 66 will automatically receive between £100 and £300 depending on personal circumstances e.g. B. Age and whether they live alone or in a nursing home.

Caroline Abrahams of Age UK, the charity, said the winter fuel payment turned out to be more important than ever for pensioners, including middle-class pensioners.

“With energy prices soaring, it’s becoming increasingly difficult for older people to heat their homes and get electricity,” she said.

James Heywood, of the Center for Policy Studies think tank, said retirees were “really feeling the pressure” this year and that the winter fuel payment had become a key source of support for many retirees.

Retirees have already started going into debt or pulling more out of their private pensions to cope with the rising cost of living. Energy bills have skyrocketed this April with £693 added to the average annual bill. Pensioners have been hit doubly as the state pension has failed to keep pace with inflation after the government backed off its promise to increase state pensions in line with earnings this year

The government could either audit the benefit or make it taxable if it wanted to make sure the payments went to those who really needed it, Mr Heywood said.

“There are strong arguments for doing this and for making better use of these funds, but let’s be realistic – assuming that this would only cut payments from relatively well-off pensioners, the savings would be quite modest,” he said.

Amid the ongoing energy crisis, the Government has pledged to extend the Warm Homes Discount, meaning the value of household rebates will rise from £140 to £150. However, similar to winter fuel payments, there is a risk that those who don’t need them won’t opt ​​out. Ian Browne of wealth manager Quilter, who submitted the FOI, said support needs to be distributed more intelligently so that funds get to those most in need.

Sir Iain Duncan Smith has previously encouraged elderly people who can well afford to pay for their own heating bills, bus fares and television licenses to give the money back to the state. When contacted, he did not respond.

A government spokesman said: “We recognize the pressure on the cost of living and will help over 11 million pensioners with energy bills this year through our energy bill rebate and winter heating oil payments. As in previous years, individuals who wish to opt out of receiving a Winter Fuel Payment can do so by contacting our Winter Fuel Payments Center.”

https://www.telegraph.co.uk/money/consumer-affairs/wealthy-pensioners-refusing-give-back-winter-fuel-benefit/ Wealthy pensioners refusing to give back winter fuel benefit

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