Should winter fuel payments for pensioners be means tested to help fund elderly care?

Paul Burstow

A person that owns an average priced home will currently pay the equivalent of around 65 per cent of its value to pay for their old-age care. But implementing the proposals of the Dilnot Commission – capping the cost of care at £50,000, and extending the means test to £100,000 – would cost an average person only 22 per cent of the value of their home. Winter fuel payments currently cost the taxpayer over £2bn annually. If it were only distributed to those on pension credit, it would save £1.5bn per year. People need to take a hit of a few hundred pounds now in order to save tens of thousands of pounds in the future. By earmarking this saved money for something else, we also stop that money from disappearing into the Treasury’s coffers, and divert it into the pockets of older people in desperate need of care.

Paul Burstow is Liberal Democrat MP for Sutton, Cheam and Worcester Park.

Ros Altmann

Finding a balance between state help and individual responsibility to pay for care costs does not imply more means testing. Stripping winter fuel payments from those with some savings would be a disincentive for people saving for retirement. Winter fuel payments were introduced as a way of topping-up basic state pensions – among the lowest in the developed world. Median incomes of pensioners are around £15,000 per year, and most pensioners need as much of this as possible. Universal payments are important in providing a minimum level of income, and can be supplemented by private savings. There are alternative ways of saving money, like increasing the age of entitlement or taxing benefits, which would pose less health risks to pensioners. Extending means testing may exacerbate the care crisis, as more pensioners suffer cold-related illnesses, leading to more people relying on state care in the future.

Ros Altmann is director-general of Saga.