When the Chancellor Rachel Reeves announced that she was withdrawing the Winter Fuel Payment from most pensioners on the same day, last July, when she awarded fat pay rises to many public sector workers she perhaps imagined herself as striking a blow for inter-generational fairness. Working people would get more money – at least if they worked in the public sector – and wealthy retirees a little less. Yet it is fast becoming the an issue which could prove her undoing.
The tragedy of the Winter Fuel Payment fiasco is that it leaves the far bigger problem untouched
We now learn that the government’s partial U-turn will involve pensioners effectively being means-tested. All would receive the benefit initially, but any pensioner household with income above the average UK level of around £37,000 would have the money clawed back through their taxes. It would work rather like child benefit, which used to be universal but is now snatched back from higher-earning couples.
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