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Research says winter fuel payments have little effect on pensioner's fuel spending

Professor Ian Walker
Professor Ian Walker
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New research by University of Warwick economist Professor Ian Walker says that the Winter Fuel Allowances for people over 60 actually have little effect on pensioners' fuel spending. Professor Walker will outline his findings at a special University of Warwick Policy Briefing at 11am on Wednesday 18th of January in the University of Warwick's London offices in 3 Carlton House Terrace. Coffee available from 10.30am and the briefing starts at 11am.

Winter Fuel Allowances are worth between £100 and £300. In his briefing, entitled "Cold Comfort: The Effect of Winter Fuel Payments", Professor Walker will say that if this payment was simply given to pensioners actual cash, without describing it as a Winter Fuel Allowance/Payment, and with no suggestion in any way as to what the money should be spent on, we would then expect that sum to raise a typical pensioner household's spending on domestic fuel by about half of one per cent - or just around £3 a year.

This figure chimes with Professor Walker's research which states that the most optimistic average increase that he could find in pensioner fuel spending as a result of receiving the actual Winter Fuel Allowances showed that only between £3 to £6 of this additional £100 - £300 resource was spent on fuel. Professor Walker says that this research means that: "We cannot, with any confidence, say that Winter Fuel Allowance results in much larger spending on fuel. It is for Christmas, not for gas."

One policy implication of this research is that that it might be better to find a way to reduce pensioners' actual winter fuel bills at source, before they receive them, rather than giving them the funds to pay winter fuel bills. There is no guarantee that this approach would not also simply be viewed as an opportunity to spend the money "saved" on fuel on other goods and services but it may have more chance of maximizing the amount of any such benefit spent on actual fuel than the current system.

Should any press wish to attend the briefing please call or email Peter Dunn contact details below:

For further information please contact:

Professor Ian Walker, Professor Of Economics
University of Warwick Tel: 024 76 523054
07785 538218

Peter Dunn, Press and Media Relations Manager,
University of Warwick Tel: 024 76 523708
or 07767 655860

PR5 PJD 16th January 2006