Arison
Thousands of Scottish pensioners are set to lose out on £30 million in support this year after the new means-test on winter fuel payments came into effect.
The Scottish Government has introduced the Pension Age Winter Heating Payment (PAWHP) to replace the old UK-wide Winter Fuel Payment, but stricter eligibility rules mean many wealthier households will no longer qualify.
What Has Changed?
The new Pension Age Winter Heating Payment (PAWHP) will provide between £203.40 and £305.10, depending on the age of the pensioner.
However, the SNP Government has aligned with the UK’s approach by removing eligibility for pensioners with a taxable income over £35,000.
- Pensioners earning more than £35,000 per year can opt out voluntarily or face the payment being recovered automatically.
- Around 16% of Scotland’s pension-age population will see their payment recovered in 2025/26, rising to 21% by 2030/31.
Projected Spending and Clawback
The Scottish Fiscal Commission (SFC) has provided estimates on the financial impact of this change:
| Year | Total PAWHP Spending | Clawback (Recovered from Ineligible Pensioners) |
|---|---|---|
| 2024/25 | £187 million | £30 million |
| 2025/26 | £193 million | £31 million |
| 2026/27 | £199 million | £34 million |
| 2030/31 | £225 million | £47 million |
These figures show that as pension incomes rise and more households cross the £35,000 threshold, the total amount clawed back will rise by more than 50% over the next five years.
Why a Means-Test?
The aim of the reform is to target support at the most vulnerable households, ensuring that those on low and middle incomes continue to receive payments to offset rising energy costs.
Wealthier households with higher taxable incomes are considered less in need of state-funded assistance.
However, critics argue that this change creates winners and losers. For some pensioners just above the threshold, the removal of the payment could cause additional financial pressure—especially given the continuing high costs of energy and food.
How Much Will Pensioners Get in 2025?
Under the new system, payments are tiered:
- Pensioners aged below 80: £203.40.
- Pensioners aged 80 and over: £305.10.
This payment is made annually and is designed to help older people meet their heating bills during the colder months.
Impact on Scottish Households
- Around 16% of pension-age households in Scotland will lose their entitlement in 2025/26.
- By 2030/31, that figure will rise to around 21%, meaning more than one in five pension-age households will not receive the benefit.
- For those who remain eligible, the scheme provides vital relief as energy prices remain a major concern across the UK.
Political Background
The decision to mirror Westminster’s approach follows controversy last year when Labour Chancellor Rachel Reeves initially proposed stripping 90% of households of winter fuel support.
Following backlash, the policy was revised to set the £35,000 income cut-off point, which has now been adopted in Scotland.
The introduction of the means-test on winter fuel payments means that £30 million will be clawed back from Scottish pensioners this year, rising to £47 million by 2030/31.
While the government insists this ensures support goes to those who need it most, critics warn that rising living costs mean even middle-income pensioners could feel the impact of losing this annual payment. For many, the £203.40–£305.10 payment remains a crucial lifeline during the winter months.
FAQs
How much will Scots pensioners receive under the new winter fuel scheme?
Eligible pensioners will receive between £203.40 and £305.10, depending on their age.
Who will lose their winter fuel payment?
Pensioners with a taxable income over £35,000 will no longer qualify, with payments recovered if claimed.
How much money is being clawed back in 2025?
The Scottish Government will recover £30 million in 2024/25, rising to £47 million by 2030/31.