If someone gave you £200 just before Christmas, what would you do with it? If you’re a pensioner, the Government believes you would spend it on heating your home. We saw this again today in the Chancellor’s Pre-Budget Report, which included: “the continuation of Winter Fuel Payments of £200 for households with someone aged 60 or over, rising to £300 for households with someone aged 80 or over, for the duration of this Parliament.” Winter Fuel Payments are the Government’s response to the continuing problem of Wintertime death and illness among older people. According to Help the Aged, last Winter, more than 25,000 people over the age of 65 died as a result of cold related illnesses.
This is shocking, and is the reason for the enormous campaign from charities and NGOs, which resulted in Winter Fuel Payments. However, there’s a problem here. When the payments arrive, many older people won’t spend it on heating. Some older people simply don’t need the extra help and treat the Payment as an excuse for indulging in a few luxuries. But even those who do suffer from the cold will sometimes opt to spend the money on gifts for the grandchildren, an extra bottle of sherry for Boxing Day, or whatever else they choose. There’s research which elaborates the problem. Professor Ian Walker of the economics department at Warwick University published a paper entitled “Cold Comfort: The Effect of Winter Fuel Payments”. You can access the briefing here: http://www2.warwick.ac.uk/about/warwickmagazine08/coldcomfort/
Professor Walker’s research found that that the most optimistic average increase in pensioner fuel spending as a result of receiving the Winter Fuel Allowances, was only between £3 to £6 of the additional £100 – £300. What does this mean? Well, as difficult as this might be for campaigners who pressed for the Winter Fuel Allowance, it is actually too blunt a tool for the job. Human behaviour is complex, and some older people might suffer the cold in order to save money on what they believe is more valuable or important. And of course, older people won’t just get cold sitting in their homes. How do you ensure people wrap up? Is a Winter Clothing Allowance required? As Professor Walker has argued, his research suggests that whether fuel spending matters for older people depends on whether cold homes affect health. The challenge of “excess deaths” that occurs each winter remains a major policy challenge. What is needed is more research into what causes cold-related illness or death, and more innovative policies for persuading older people to put the heating on.