As the withdrawal of Winter Fuel Payments sees millions of pensioners lose up to £300, Katy Ward asks if there are other ways to make this money back.
The decision to strip millions of pensioners of the Winter Fuel Payment has been one of the most controversial policies of the new Government.
With almost immediate effect, retirees lost either £200 or £300 to help cover their fuel bills this Winter.
The exact amount pensioners received previously depended on the person’s age and who else lived with them.
From now on, however, Winter Fuel Payments will only be available to those who receive Pension Credit or other means-tested benefits.
The speed of the Government’s decision has left many reeling, with concerns for those who had already factored Winter Fuel Payments into their budgets for the year ahead.
In this article, we look at four ways older people may be able to mitigate some of these losses.
1. Switch banks (up to £200)
If you’d like to recover from the loss of the Winter Fuel Payments, switching to a new current account could be one of the simplest options.
As the market leader, Lloyds is offering a £200 bonus to open a new Club Lloyds, Club Lloyds Silver or Club Lloyds Platinum account.
Note, the Platinum and Silver accounts are fee-paying, with pretty high monthly fees of up to £25.50.
You’ll also bag a ‘lifestyle benefit’, such as six cinema tickets, an annual digital Coffee Club or Gourmet Society membership, a yearly magazine subscription, or 12 months of Disney+.
As a fee-free option, First Direct offers £175 if you open a 1st Account.
You’ll also benefit from an ongoing £250 0% overdraft and access to a 7% Regular Saver account.
You can read our full round-up of the latest current account switching bonuses here.
2. Cashback credit cards (up to £125)
Getting paid for your spending through a cashback credit card is another way of upping your income this year.
But what are the most attractive deals?
The American Express Platinum Cashback Everyday Card (representative APR 30.7%) offers 5% cashback for the first five months.
You can earn up to £125 during this introductory period.
After that, you’ll get 0.5% cashback on any spending of up to £10,000 and 1% cashback on all sums above that.
Alternatively, Santander’s Edge Credit Card pays up to 2% on purchases for the first 12 months.
Remember, the key here is discipline. Cashback credit cards often come with relatively high interest rates, so you may end up out of pocket if you don’t pay off your bill in full each month.
3. Cashback websites (up to £345)
As with the credit cards mentioned above, a cashback website could allow you to get paid for your everyday spending.
When you shop online through a site such as Quidco, Top Cashback or Rakuten, they receive a commission from the retailer for referring you and will then share a portion of this with you.
Quidco claims its members earn more than £300 per month on average.
4. Switch your energy supplier (approximately £90)
With the Energy Price Cap increasing by 10% at the start of this month, the average dual fuel bill has jumped by £149 per year to £1,717.
Worryingly, the news has led to a suggestion that some older people may consider turning off their heating during the Winter.
While the culture of energy switching effectively disappeared following Russia’s invasion of Ukraine, it is making a comeback.
At present, some providers are offering fixed-rated deals coming in below the Price Cap – this is the maximum amount you can pay for a unit of energy and is set by regular Ofgem.
As of the most recent estimates, moving to a fixed deal could save you £90 per year if you're a typical energy user. Higher users could save even more.
So if you’ve not already locked into one, take a few minutes to do so now (this link will take you through to the Uswitch energy comparison page).
LoveMONEY comment: switch energy NOW or be stuck overpaying this Winter
Not for everyone
With the loss of Winter Fuel Payments being such a serious topic for so many of our readers, we would never want to suggest that recouping these funds is a simple process.
We understand there are some retirees who may not be comfortable switching banks online or managing a rewards credit card.
Also, it would be a mistake to lump all pensioners together. An early retiree may not even be 60 and perfectly happy managing their money online.
At the other end of the spectrum, there could be those in their eighties who have never used a computer.
What’s more, the conversation around Pension Credit take-up comes into play.
As one positive, the Government has – not deliberately – created a very successful drive for Pension Credit awareness campaign by axing Winter Fuel Payments.
Know your rights
Finally, it would be a mistake to assume that you don’t qualify for Winter Fuel Payments.
It is therefore essential to check your eligibility.
For example, you should be eligible if you were born on or before 22 September 1958 and receive one of the following benefits:
- Pension Credit
- Universal Credit
- Income Support
- Income-based Jobseeker's Allowance
- Income-related Employment and Support Allowance
- An award of Child Tax Credit or Working Tax Credit of at least £26 for the tax year 2024/25