Scotland scraps universal winter fuel payments for pensioners

The Scottish Government has confirmed that it will follow the UK Government’s lead and stop providing winter fuel payments to all pensioners.

Instead, the benefit will be means-tested, while the introduction of a Scottish benefit to replace it has been delayed.

Scotland’s Social Justice Secretary Shirley-Anne Somerville said she had “no choice” after the chancellor… announced cuts south of the border.

Ms Somerville said the Scottish Government had lost up to £160m in funding it was expecting from the Treasury to set up the new benefit.

This came as Scotland’s finance secretary put the brakes on spending to help fund public sector pay deals.

Shona Robison has written to her Cabinet colleagues urging tighter rules on discretionary spending.

Chancellor of the Exchequer Rachel Reeves announced last month that those not in receipt of pension credits or other means-tested benefits in England and Wales would no longer receive annual winter fuel payments, worth between £100 and £300.

Ms Somerville said the UK government’s decision led to a £140m cut in Scottish funding and they were left with “no choice” but to follow Westminster.

He added that the Scottish Government was in “the most difficult financial circumstances since devolution”.

The Scottish Government spending measures introduced by Ms Robison mean departmental plans will be subject to greater scrutiny and in some cases may need approval from the First Minister.

Some projects that were scheduled to start but are not yet underway could also be cut; details will be announced to the Scottish Parliament.

The development occurred as Gers figures revealed Scotland’s public spending deficit is set to rise by £3.6bn to £22.7bn in 2023-24 due to lower oil and gas revenues.

Ms Robison is understood to be concerned about the impact of a Financial audit announced by Chancellor Rachel Reeves.

The Scottish Government does not know how much money it will have for the current financial year until the Treasury provides clarification.

SNP Ministers recently provided additional funding First Minister John Swinney said funding the new offer would mean tough choices for the government.

This comes as NHS staff in Scotland are expected to push for a pay rise in line with increases south of the border.

Responsibility for paying for winter fuel was due to be transferred to the Scottish Government in September and replaced by a Holyrood-administered equivalent: the Retirement Age Winter Heating Payment (PAWHP).

Ms Somerville said the chancellor’s move had reduced funding for the return of the new benefit by between £140m and £160m in 2024-25.

He said that represented almost 90% of the cost of the PAWHP, which is now not due to be introduced until winter 2025.

“This has been a very difficult decision and not one we wanted or expected to make,” Somerville said.

“However, despite all efforts to review our financial situation, this is a necessary decision when we are faced with such a deep budget cut and in the most difficult financial circumstances since devolution.”

He The Scottish Government had estimated that one million Scottish pensioners who were eligible for the UK payment would receive the PAWHP of between £100 and £300.

Ministers had said the benefit would not be means-tested and entitlement would be universally granted upon reaching state pension age.

It is separated from the winter heating payment which helps people on low-income benefits who may have additional heating needs.

The chancellor has said the UK Labour government has had to make “difficult decisions” because of a £22bn hole in the public finances caused by overspending by the previous Conservative administration.

Age Scotland policy director Adam Stachura accused the Labour administration of rushing into cuts he said were too deep.

The charity’s director said the decision would mean at least a quarter of a million pensioners in Scotland on the lowest incomes or living in fuel poverty would no longer receive “vital” financial support, while hundreds of thousands more on modest incomes would struggle more to pay energy bills.

She urged the UK government to reverse the cuts, which she said were affecting “social security devolution and the needs of Scottish pensioners living in some of the coldest homes in the UK”.