Scotland scraps universal winter fuel payments for pensioners

The Scottish Government has confirmed that it will no longer provide winter fuel payments to all pensioners.

The once-universal benefit will now be means-tested and will be a replica of a UK Government Decision.

The introduction of a replacement Scottish benefit has also been delayed.

This comes amid reports that Finance Secretary Shona Robison has written to her Cabinet colleagues and ordered them to freeze all unnecessary spending to help pay public sector pay settlements.

Social Justice Secretary Shirley-Anne Somerville announced the move on Wednesday, saying ministers had “no choice” given the cuts made south of the border.

In July, Chancellor Rachel Reeves revealed that the payment, worth between £100 and £300, would be subject to a means test in England and Wales, with only those receiving benefits eligible.

The number of pensioners receiving the payment is expected to be cut from 11.4 million to 1.5 million, saving the Treasury around £1.4 billion this financial year.

Payment is a decentralized matter in Scotland and Northern Ireland, although the UK government’s approach is expected to result in a cut of up to £160m in Scottish funding in 2024-25.

The Scottish Government had intended to replace the winter fuel payment this year with its own Retirement Age Winter Heating Payment (PAWHP).

That has now been postponed until 2025-26, with Ms Somerville claiming the anticipated cuts amount to up to 90% of PAWHP funding.

The Scottish Government said initial analysis suggests the workload in Scotland will fall by around 900,000 in 2024-25 based on current take-up of pension credit, and will now support up to 130,000 people receiving pension credit and other means-tested benefits.

Ms Somerville said: “Despite every effort to review our financial position, we have been left with no option but to follow the UK Government and restrict payments to older people who receive the relevant eligible benefits.

“This is a necessary decision in the face of such a deep cut in our funding and in the most difficult financial circumstances since the devolution of powers.”

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Meanwhile, Scottish Government Revenue and Expenditure (Gers) figures revealed the country’s public spending deficit has risen from £18bn in 2022-23 to £22.68bn in 2023-24 due to lower revenues from the North Sea.

As a percentage of Scotland’s GDP, the deficit has risen from 8.4% to 10.4%, compared with the UK deficit, which fell from 5% to 4.5% over the same period.

Total revenues in Scotland increased from £86.8 billion to £88.5 billion.

Public spending per capita in Scotland is £2,417 higher than in the rest of the UK, with an average spend of £20,418 per person north of the border.

Finance Secretary Ms Robison said the deficit was “not a reflection of the Scottish Government’s finances or policies – it is a reflection of the UK Government’s decisions”.

He said the Scottish Government would ensure public services do not “fall apart”, adding: “Our priority is clear – making sure we maintain public services, we continue to tackle poverty and we continue to invest in net zero emissions and transforming our economy – those are our key priorities.”

“But we will have to decide what we deprioritize, and that work is ongoing.”

Ms Robison also raised the possibility of a reduction in public sector staff, saying “there will absolutely be restraint in recruitment”.

The Dundee City East MSP cited her letter to cabinet colleagues, saying recruitment will only be allowed to go ahead in critical areas, such as blue light services.

The Scottish government will work with the public sector, he said, to determine what “voluntary options” are available in light of the policy of not allowing compulsory redundancies.

The UK government has been contacted for comment.