Following the announcement this week, it looks like the Labour government is going to u turn on the Winter Fuel Allowance. My comments are therefore far more limited than they would been.
It is not really a surprise given what a badly implemented policy it was and the way it affected the less well off pensioner. It beggars belief how the government and Rachel Reeves could have thought this was a good idea in the first place.
I suppose the reason was, in their election promises, they said they would not put up income tax and national insurance, but said very little on many other issues. This gave them the opportunity to hit people in their pockets in other ways whilst keeping the facade of not going back on election promises. I wonder how that is working out for them! (no increase in national insurance, smash the gangs!)
But at least now, they are going to backtrack.
The question is to what extent they will roll back this policy? I expect a very limited increase will be announced in the autumn but it will not revert to previous levels of benefit. I also expect it to be complicated to manage causing further waste in Whitehall. We will have to see!
So, if it was up to me, what would i do?
Firstly, I would get on and announce the change, not wait until the autumn. Why wait? If the people in charge can’t come up with a plan and get on with implementation, they should not be in power.
I worked in Civil Engineering for 35 years and knew that deferring a decision was the worst thing we could do. We had to quickly consider the situation and solutions, make a decision and get on with it and live with the consequences.
Secondly, one of the injustices of this allowance , whilst it is to help the vulnerable with their winter fuel bill, it also helps the wealthy pensioners.
So if we were to limit the payments, it would cause a significant amount of administration to means test the benefit. We want to make things simple.
So what i would do, is make it a taxable benefit, so those who pay no tax , get 100% of the benefit. Those on basic taxation they get 80% of the allowance and those on the higher rates will only get 60% of 55% of the allowance.
Doing this means all those getting the state pension would get the allowance included in their OAP payments and HMRC would sort the rest via tax code / tax returns. You do not need extra staff to administer the means testing of individuals.
The above will cost an additional £1.3 billion when compared with 2024/25 (£311m) but save £0.5 billion when compared with 2023/24
And how would I pay for this? Well, as stated in my earlier page on the triple lock, this payment would come out of the massive saving by scrapping the triple lock and just increasing pensions by inflation.
If it was up 2 me 
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