Budget 2015: Why are we spending so much on overseas winter fuel allowance?

On Wednesday, Chancellor George Osborne presented his Budget to parliament.

While new policies like the increase in the personal tax allowance (or setting aside £1m to commemorate the Battle of Agincourt) grabbed the headlines, it was a one-liner on page 71 that caught my attention – ‘Winter Fuel Payments: overseas eligibility’.

Screenshot Budget 2015 showing savings in winter fuel allowance

This came under the category of ‘Measures announced at Autumn Statement 2013’, i.e. to be implemented in the 2015 Budget. It lays out the amount of money which will go back to the government through the cutting of overseas winter fuel payment – a projected total of +£85m from fiscal years 2015/2016 to 2019/2020, according to the Budget.

All well and good – but this begs the question: How much were we actually spending on overseas winter fuel payment in the first place?

It’s (not?) always sunny in the south of Europe

Turns out, it’s not so much the total amount spent that is so surprising, but the European Economic Area (EEA) countries – and Switzerland – in which it is spent. Pensioners who live overseas could qualify for winter fuel allowance payments irregardless, as it turns out, of how hot or cold their chosen country actually was…

For the fiscal year 2013/14, a total of £21,736,000 was spent on overseas winter fuel payments to British pensioners living in the EEA and Switzerland.

Overseas Winter Fuel Payments - fiscal year 2013/14
Get the data: Winter Fuel Payment statistics (Gov.uk)

Of this total, Spain topped the chart, with over £8million spent in the year. Fair enough you might say, some parts of Spain maybe can get quite cold in Winter.

However fourth-highest on the list is the freezing country of… Cyprus. In the fiscal year 2013/14, over £1million (£1,432,000 to be exact) was spent keeping British pensioners warm.

Cyprus does not get that cold. In the winter months, an average temperature ranges from a freezing 12ºC to 14ºC. To put this in perspective, this is like summer in most parts of the United Kingdom.

Other countries not exactly famous for their freezing winters include Malta (average winter temperatures of between 10ºC – 15ºC), Greece and Portugal.

If you’re looking for areas of spending to save on, overseas winter fuel allowance is probably as good a place as any to start. After all, we could have commemorated the Battle of Agincourt 21 times over if it had been cut a year earlier.

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