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Winter Fuel Allowance

Volume 450: debated on Monday 23 October 2006

To ask the Secretary of State for Work and Pensions what percentage of a pensioner’s average energy bill was met by the winter fuel allowance in (a) 2003, (b) 2004 and (c) 2005; and what the estimated percentage is for 2006. (93776)

[holding answer 16 October 2006]: The winter fuel payment is intended to provide a contribution towards winter heating bills which account for around 60 per cent. of the total fuel bill. Winter fuel payments increased from £20 in 1997-98 to the current value of £200 for households with someone aged 60 to 79 years of age, and £300 for households with someone aged 80 or over. The information is in the table.

2003-04

2004-05

2005-06

2006-07

Average amount spent on fuel

549

583

651

780

Average winter fuel payment

235

233

234

235

Percentage of total fuel bill met by winter fuel payment

43

40

36

30

Notes:

1. Pensioner expenditure on fuel is unavailable from the Family Expenditure Survey in 2005-06 and 2006-07. Expenditure for these years is forecast using 2004-05 fuel expenditure uprated by fuel price inflation in 2005-06 and 2006-07. It has been assumed that energy prices will stay at second quarter of 2006 levels for the remainder of 2006-07.

2. Average winter fuel payments have been calculated by dividing expenditure on winter fuel payments by the number of households in receipt of winter fuel payments.

Source:

Family Expenditure Survey 2003-04,2004-05; DWP Administrative data.

Between 1996-97 and 2004-05 (the latest year for which data are available) pensioner incomes increased by 25 per cent. in real terms, compared with a 15 per cent. real terms increase in utility bills between 1996-97 and 2006. It is important to note that while pensioner incomes tend to increase on a linear basis, with 4 per cent. real growth between 2003-04 and 2004-05 building on the growth in earlier years, utility prices tend to fluctuate.