Pension Age Winter Heating Payment: Equality Impact Assessment (EQIA)

Key Findings

Protected Characteristics

Age

20. Poverty and income inequality statistics define pensioners as adults who have reached their state pension age, with the state pension age for both men and women increasing to 66 years in the most recent reporting period.^[15]

21. According to a 2023 report by Independent Age, one in seven people over state pension age live in poverty in Scotland.^[16] By 2030, 1.1 million people in Scotland will be over pension age (one in five people).

22. The Scottish Government estimates that 15% of pensioners (150,000) were living in relative poverty after housing costs in 2020-23, with levels of pensioner poverty largely stable in recent years.^[17] Before housing costs, 17% of pensioners (170,000) were in relative poverty. Pensioner poverty rates are typically higher before housing costs than rates after housing costs, because the majority of pensioners tend to have a relatively low income, but incur low housing costs as they own their home. It is therefore more meaningful to use the after-housing-costs poverty measure for comparing the standard of living between pensioners and other age groups.

23. Research shows that a lower proportion of older households (45%) live in dwellings with the highest energy efficiency bands (EPC C or better, SAP 2012), than families (60%) or other households (55%).^[18] In addition to this, Families have a lower rate of fuel poverty (27%) than older households (36%), however the rate between families and other households (29%) and older and other households in similar.^[19]

24. Research published by Age Scotland in 2022 suggest that 76% of older people are always concerned about paying fuel bills.^[20] Public Health Scotland records indicate that over half of single pensioner households. According to Age Scotland, just 16% of respondents to their 2022 ‘Taking the Temperature’ survey were very satisfied that they could heat their home to a comfortable level, 30% were fairly satisfied, with 34% not satisfied they could heat their home to a satisfactory level.^[21]

25. In a poll commissioned in September 2022 by Independent Age of those over 65 with a household income below £20,000, 65% were worried they won’t be able to pay for gas, and 69% were worried they couldn’t pay for electricity. 74% admitted to cutting back on their heating, while 53% of participants also revealed that their current income negatively impacts their quality of life.^[22]

26. Older households are less likely than families and other household types to report that their heating system doesn’t always keep them warm in winter; 12%, compared to 16% of families, and 21% of other households.^[23] Living in a cold home can be detrimental to many older people, due to reduced muscle mass and poorer circulation they are not as physiologically able to keep warm during cold periods. This can affect their immune systems which can amplify any pre-existing condition.^[24]

27. Ensuring financial security in older age was a key priority laid out in the Scottish Government’s paper ‘A Fairer Scotland for Older People: framework for action’, published in 2019.^[25] This framework affirmed that whilst remaining in paid employment for longer will clearly support this aspiration, for many older people, financial security depends on ongoing access to pension funds, both state and private, and a range of other financial benefits and measures. As such, tackling pensioner poverty in the shorter term will primarily be the result of action to tackle costs of living, and to maximise incomes from social security and benefits in kind.

28. The Fairer Scotland Action Plan, published in 2018, also set out the Scottish Government’s commitment to ensuring that, wherever possible, older people can enjoy a thriving 'third age'. The Plan set out that this meant supporting people who want to keep on working, maximising incomes, and reducing costs where possible.^[26]

29. Within our public consultation, some respondents expressed concerns that older people in Scotland could receive less or lose out on funds compared to those in the rest of the UK if changes are made to the benefit in the future. Some respondents expressed concerns that targeting the benefit to those in receipt of Pension Credit could result in the exclusion of those just above the threshold to receive this benefit, but who are still in need of financial assistance.

30. The evidence shows that older people do experience financial barriers. Older people are more likely to face higher energy bills due to the likelihood of existing health conditions and, spending more time at home.

31. Pension Age Winter Heating Payment will provide support to pensioners in receipt of relevant benefits, and will mirror the UK Government’s WFP means tested eligibility.

32. The UK Government’s decision to restrict eligibility in this way will reduce the number of individuals in Scotland entitled to a payment by roughly 900,000 compared to those who would have been eligible had the benefit been paid on a universal basis. It is estimated that between 110,000 and 130,000 pensioners will be eligible for payment in Scotland this winter, dependent on Pension Credit up-take.

33. Initial analysis suggests that Scotland’s proportion of Pension Credit claimants is marginally higher than that in the rest of the UK, with respect to State Pensions (about 12% for the rest of UK, and 12.8% for Scotland). Nonetheless, take-up of Pension Credit is the lowest of all benefits (caseload take-up of 66%) and therefore the restriction of eligibility to those in receipt of Pension Credit may impact upon the vulnerable pensioners who would otherwise automatically receive the payment under the revised eligibility rules. The Cabinet Secretary for Social Justice has continued to urge the UK Government to do more to protect energy customers in greatest need and has written to the Secretary of State for Work and Pensions to ask her to do more to increase Pension Credit take up rates and to move forward with plans for a social energy tariff. While Scottish Ministers have no formal role in the administration of reserved benefits, the First Minister wrote to councils and COSLA seeking their urgent assistance to promote the take-up of Pension Credit, which is the main qualifying benefit for our older people to receive a Pension Age Winter Heating Payment.

34. The change in eligibility is also likely to impact upon those pensioners who are not eligible for Pension Credit, but still face financial difficulties. Given the late decision taken by the UK Government, and the lack of prior consultation with the Scottish Government, it would not be practicable to consider alternative eligibility criteria which might address these risks and ensure that payments are made this winter.

35. The Scottish Government is committed under the ‘Fairer Scotland for Older People’ strategy to seek to ensure the financial security of older people in Scotland. PAWHP will contribute to that ambition together with a wider range of initiatives to mitigate fuel poverty, such as our energy efficiency delivery programmes – Warmer Homes Scotland and Area Based Schemes – which have supported over 150,000 households living in, or at risk of fuel poverty in the past decade, as well as our Islands Cost Crisis Emergency Fund which helps island authorities support their island communities through cost-of-living pressures. Additional support through Winter Heating Payment is available to pensioners in receipt of Pension Credit.

36. Support in addition to social security payments, and the support mentioned above, is available through the Scottish Governments investment in our Council Tax Reduction Scheme and free bus travel for all older people over the age of 60 in Scotland. The Scottish Government has also provided over £2 million from our Equality and Human Rights Fund, supporting older people’s organisations to deliver work focused on tackling inequality and enabling older people to live independent and fulfilling lives.

37. The Scottish Government continues to support vulnerable households from fuel poverty through a range of actions within our limited devolved powers. This year alone, we are spending £134 million on activities to mitigate UK Government policies through schemes such as Discretionary Housing Payments and the Scottish Welfare Fund, which provide vital support to households struggling to meet their housing and energy costs.

38. The Scottish Government is committed to tackling fuel poverty and has consistently supported vulnerable households through a range of actions, including delivering our Winter Heating Payment which, in contrast to the UK Governments Cold Weather Payment, guarantees a reliable annual payment of £58.75 to people on low-incomes, including those pensioners in receipt of Pension Credit each winter.

39. Similarly, ending child poverty is our single greatest priority. We’ve already consistently up-rated all benefits in line with inflation, and our intention now is to provide certainty to families and put more money in their pockets by making it a legal requirement to annually up-rate all devolved benefits – including Best Start Grants, Best Start Foods and our winter heating payments. This is an estimated investment of at least £6 million for 2025-26, rising to at least £12 million in 2029-30, according to the latest published SFC forecasts.

40. Following the UK Government’s decision to restrict WFP eligibility,the provision of PAWHP to those of state pension age in receipt of relevant eligible low income benefits results in different levels of support available for those between those of pension age and those who are below pension age who have similar needs identified.

41. Given the cross-over with entitlement for Pensioners in receipt of Pension Credit who already receive Winter Heating Payment, these individuals will now be eligible for an additional low income benefit not available to other recipients of Winter Heating Payment, such as those who are not of pension age on low incomes and who have a young child or someone disabled within the household.

42. The Scottish Government recognises the importance of ensuring as many people as possible are supported under PAWHP and acknowledges that other people of pensionable age may also face financial difficulties and would benefit from this support.

43. The UK Government’s changes to WFP eligibility will reduce Scotland’s Block-Grant Adjustment associated with devolution of the UK’s Winter Fuel Payment by an estimated £150 million in 2024-25, over 80% of the cost of the Scottish Government’s replacement benefit. Given these financial constraints and the lack of prior consultation with the Scottish Government, and after careful consideration, Ministers have reluctantly concluded that eligibility must be restricted to those in receipt the relevant qualifying benefit in order that payments may be made this winter. Despite the evidence on relative poverty and the likelihood of some pensioners not in receipt of one of the qualifying benefits falling within that group, it is considered that this approach is considered to strike the right balance. Given the budgetary restraints imposed by the UK Government's decision, support is targeted on those individuals who can readily be identified as most likely to benefit most from this support this winter.

Disability

44. In 2020-23, the poverty rate after housing costs for people in households with a disabled person was 24% (560,000 people each year). This compares with 18% (560,000 people) in a household without disabled household members.^[27]

45. Fuel poor households with low levels of energy efficiency are more likely to have at least one member who has a long-term illness or disability (56%) when compared to non-fuel poor households in similarly inefficient homes (41%).^[28]

46. Evidence highlights that there is a relationship between long-term health conditions or disability and increasing age. The 2020 Scottish Health Survey found that the prevalence of any long-term condition increased with age, from 32% among those aged 16-44 to 68% among those 75 and over.^[29] The likelihood of being disabled/experiencing chronic and complex health conditions among those 65 and over increases with age.^[30]

47. In Consumer Scotland’s report on their findings about the impacts of energy costs on disabled people and people with health conditions, they highlight that disabled people, those with health conditions and their family carers are at greater risk of energy affordability challenges. They also reflected that those of older age are particularly affected.^[31]

48. According to Consumer Scotland’s Energy Affordability Survey, 68% of disabled people reported rationing their energy use, compared to 56% of non-disabled people. This report also highlighted that 41% of disabled people found it difficult to keep up with their energy bills in comparison to 24% of non-disabled people.^[32]

49. Within our public consultation, some respondents suggested that eligibility for PAWHP could be extended to adults with disabilities who are below pension age. These respondents highlighted that those with disabilities could benefit from support with heating costs, as they often need to maintain a higher household temperature, and are likely to spend longer periods of time in their home.

50. Similarly, many responses to our Experience Panel survey on PAWHP suggested that a payment should be extended to adults with disabilities, as they may be affected by cold weather due to their condition, or may spend longer periods within their home due to limited mobility, resulting in greater heating costs. Respondents also noted the additional costs associated with running healthcare equipment for disabled people.^[33]

51. Given the pressure on timescales for delivery and the budgetary impact of the UK Government’s restriction of WFP eligibility, it will not be practicable or affordable to expand the eligibility criteria. However, we will continue to review the eligibility and scope of PAWHP moving forward to ensure, where possible, that we maximise the impact of the benefit.

Sex

52. Research shows us that female pensioners are more likely to live in poverty than male pensioners. This could be as a result of having fewer years of employment due to caring responsibilities.^[34] In 2019-22, 23% of single female pensioners (60,000 women each year) were in relative poverty after housing costs, compared to 18% of single men.^[35]

53. Healthy Ageing in Scotland’s (HAGIS) Pilot Survey notes a substantial amount of older people live alone (34%), with women more likely to live in a single household (44%), rather than men, 30%.^[36] We know that most years, the poverty rate after housing costs for single female pensioners has been higher than for single male pensioners.^[37]

54. Since 2008 there has been a gradual increase in the proportion of adults reporting living with a long-term health condition, slightly more pronounced for women (42% in 2008 and 52% in 2022) than for men (38% in 2008 and 45% in 2022).^[38] Women were more likely than men to report having a limiting long-term condition (42% and 32% respectively).

55. We have not identified any particular barriers resulting from our policy approach which may affect people based on their gender, although it is acknowledged that this change in policy may have a greater impact on women of pensionable age based on the evidence noted above. Through the mirroring of eligibility currently in place for WFP, PAWHP will provide support for individuals of state pension age in receipt of relevant benefits with the costs of heating over the winter.

Gender reassignment and sexual orientation

56. There is no robust data relating to the proportion of people of any age in Scotland to whom the gender reassignment protected characteristic would apply. However, we recognise that a potential barrier to trans people and those who identify as non-binary, accessing support can be a requirement for individuals to provide their gender if they were to make an application. Non-binary people in particular can be excluded if individuals are asked to tick a box to indicate their gender and only binary options are available. This was reiterated by LGBTI youths throughout previous Scottish Government consultation engagement for CWHA - those who had undergone gender reassignment discussed feelings of being ‘outed’ by this process as they had to reiterate that they had changed gender.

57. When Social Security Scotland deliver PAWHP from 2025/26, it will remain an automated payment for the vast majority of eligible recipients and therefore very few people will need to make an application. Where applications are required, a person will not be required to provide their gender. However, anyone that does apply is asked to voluntarily provide this information for statistical purposes only.

58. Whilst DWP will deliver this on behalf of Scottish Ministers in winter 2024/25, once delivered by Social Security Scotland from winter 2025/26 onwards, the design of our systems and the training of our staff will ensure that regardless of who the applicant or client is, they will be treated respectfully. Agency staff will be recruited and trained to embody values of dignity and respect and all training for new staff will include LGBTI awareness and be underpinned by human rights principles.

59. We do not anticipate anyone to be negatively impacted by the introduction of PAWHP on the basis of gender re-assignment or sexual orientation.

Religion or belief

60. We have not identified any particular barriers resulting from our policy approach which may affect people with the protected characteristic of religion or belief.

Pregnancy and maternity

61. As our benefit will be paid to people of pension age, we do not believe pregnancy and maternity status to be a significant factor for our target group.

Race

62. Poverty rates for people in minority ethnic households are higher than for the general population in Scotland, and minority ethnic people are more likely to be in relative poverty after housing costs.^[39]

63. At the time of the 2022 census, 87.1% of Scotland’s population identified as “white” “Scottish” or “Other British”, while 12.9% identified as belonging to another ethnic group.^[40] In 2022, 5% of Scotland’s population communicated in a “main language” other than English.^[41]

64. Pensioners from black and Asian communities are around twice as likely as white pensioners to be living in poverty, with 33% Asian, and 30% black pensioners living in poverty, compared to 16% white pensioners.^[42]

65. Gypsy/traveller households were more likely to have no central heating (5%) than all other households (2%). They were also more likely to have electric central heating and two or more types of central heating. Only 62% of gypsy/traveller households had gas central heating, compared to 74% of the overall population.^[43] The guaranteed payment will benefit older members of their community with heating costs during the winter months.

66. Gypsy/travellers are more likely to have one or more long-term health conditions. 37% reported at least one health condition, compared to 30% of the population as a whole, and are twice as likely to report three or more health conditions (6% compared to 3% among the rest of the population).^[44]

67. Within our PAWHP Experience Panel survey, some respondents highlighted that groups such as gypsy/travellers may need additional support with heating costs due to their living condition or type of housing.^[45]

68. Similarly, within our public consultation some respondents emphasised that many within the gypsy/traveller community do not have access to a bank account. Respondents highlighted the importance of flexible payment arrangements, to ensure that this group is not unfairly disadvantaged.^[46]

69. We recognise that the payment method will be important for some people and particularly gypsy/traveller communities. Payments can be made in a range of ways - into a UK bank or building society account or into someone else’s account that they can access.

70. PAWHP is intended to be an automatic payment for the vast majority of clients, with an application only required in specific circumstances. This automated approach should reduce any additional challenges to accessing this benefit.

71. Furthermore, Social Security Scotland, once they begin delivering PAWHP from winter 2025/26 onwards, will create a bank of PAWHP stakeholder resources and content, in accessible formats, available to stakeholder organisations through the National Stakeholder Engagement team, and for organisations to distribute to people in local communities. The languages we proactively translate materials into were selected through stakeholder consultation. These are: BSL Farsi, Mandarin, Cantonese, Urdu, Gaelic, Polish, Arabic, Ukrainian, braille and easy read formats.

72. Social Security Scotland will produce communications materials in other languages on request. In some circumstances, printed marketing materials may not be the right way to engage with these communities and, where this is the case, we will provide an engagement approach through work carried out by the National Stakeholder Engagement and Local Delivery functions.

73. National Carer Organisations advocated in their consultation response for accessible resources to be produced to benefit ethnic minority groups, recommending the Minority Ethnic Carers of People Project (MECOPP) briefing on Producing Accessible Information for BME Communities as a useful tool for this.

74. While it is clear that older people from ethnic minority communities experience numerous barriers, we have not identified any particular barriers resulting from our policy approach which may affect people based on race.

Marriage and Civil Partnership

75. In data published for 2019-22, married adults were the least likely to be in poverty.^[47]

76. Analysis from Age UK shows that single female pensioners (27%) have a much higher risk of being in poverty than single men (23%), and pensioner couples (13%).^[48]

77. We have not identified any particular barriers resulting from our policy approach which may affect people with the protected characteristic of marriage or civil partnership. However, we are keen to seek feedback on lived experience of the current UK benefit to identify any issues related to Marriage, Civil Partnership and relationship.

Recommendations and Conclusion

78. The key aim of this benefit is to provide pensioners in receipt of the relevant benefits with extra support to help meet increased heating costs during the winter. This support is particularly important given that energy prices remain high amid the current cost-of-living crisis. Based on the evidence collated, it is clear that the UK Government’s decision to change policy from universal eligibility to restricted eligibility based on receipt of relevant benefits, is likely to impact vulnerable pensioners who are not eligible for Pension Credit, or who do not take up their entitlement, but still face financial difficulties, and this is likely to have an equalities impact. The Scottish Government acknowledges that other people of pensionable age may also face financial difficulties and would benefit from this support. The timing of the UK Government decision,taken without any prior consultation with the Scottish Government, and the significant financial impact of this decision, means it is not possible to extend the payment on a universal basis.

79. PAWHP will not solely be a fuel poverty measure, but will continue to provide reassurance to older people that they can afford to keep warm in the winter months when heating bills are higher. This is particularly important given the significant increase in the cost of living. In addition to the targeted support for fuel for older households, this also provides a vehicle for any additional financial support that may be required.

80. The Scottish Government’s primary consideration is always about providing the right level of financial support.

81. The Scottish Government will receive funding from the UK Government through the Block Grant Adjustment to support delivery of PAWHP. As noted previously, the UK Government’s approach to restrict eligibility to WFP has a significant financial impact, reducing the Block-Grant Adjustment associated with devolution of the UK’s WFP by an estimated £150 million in 2024-25, over 80% of the cost of the Scottish Government’s new replacement benefit, PAWHP.

82. Based on affordability and deliverability considerations laid out above the Scottish Government intends to introduce PAWHP this winter in equivalent terms to WFP, with eligibility restricted to those in receipt of relevant benefits. This year PAWHP will be delivered in Scotland by DWP, under an agency agreement with Social Security Scotland.

83. We are focussed on delivering PAWHP safely and securely and ensuring pensioners continue to receive this vital support, whilst considering improvements that could be implemented in the future.