Winter fuel allowance to fall in 2011Tax-free winter fuel payment will drop

25 March 2011

Pensioners will get a lower winter fuel allowance this year

Older people will get lower tax-free winter fuel allowances in 2011

The tax-free winter fuel allowance payable to pensioners every year will fall in 2011, it has been revealed.

Although George Osborne, Chancellor of the Exchequer, did not mention the payments in his Budget speech to the House of Commons on Wednesday, the Budget documents revealed that the fuel payments will decrease.

The temporary top-up to the allowance, which offered the over-60s £250 towards their fuel bills and the over-80s £400, will revert to lower levels.

This year, those aged 60 and over will receive £200, while pensioners aged 80 or over will receive £300.

Cutting fuel costs

Charities have criticised Mr Osborne for reducing the winter fuel allowance, but also for failing to make this clear during the delivery of the 2011 Budget.

Michelle Mitchell, charity director at Age UK, said: 'We appreciate that the core winter fuel payment has been retained in the face of huge financial pressures, but with energy prices continuing to escalate, many older people will be very disappointed that the additional payments given since 2008 will not be renewed.

'While the uplift was billed as a temporary measure, renewed annually, for those older people struggling to pay fuel bills, this is a question of semantics and they will view the measure as a cut.’

For those people concerned about he cost of gas and electricity, Which? offers advice on cutting fuel costs and an energy switching service, Which? Switch, which will help you find the cheapest fuel deal available.

More on the 2011 Budget

If you missed our live coverage of the 2011 Budget, you can replay our live blog to get the lowdown on what Which? Money experts made of the Chancellor’s announcements.

We’ve also put together a handy Budget 2011 highlights guide, which oulines all the main points that might affect your finances.

pound coins

Which? Money when you need it

You can follow @WhichMoney on Twitter to keep up-to-date with our Best Rates and Recommended Provider product and service reviews.

Sign up for the latest money news, best rates and recommended providers in your newsletter every Friday.

Or for money-saving tips, and news of how what's going on in the world of finance affects you, join Melanie Dowding and James Daley for the Which? Money weekly money podcast

For daily consumer news, subscribe to the Which? news RSS feed here. And to find out how we work for you on money issues, visit our personal finance campaigns pages.