Pension Age Winter Heating Payment: Business and Regulatory Impact Assessment

Rationale for Government Assistance

21. The rationale for introducing PAWHP for those earning £35,000 or less is to provide pensioner households in most need with additional support to meet increased heating costs during the winter, with the intention of helping them to heat their homes for longer. The payment will protect many pensioners including those on low incomes. Older people are targeted because they may be particularly vulnerable to the effects of cold weather during the winter months^[5] and are more likely to be on fixed incomes.

22. Evidence has shown that living in a cold home can have a negative impact on health, emotional wellbeing and resilience. Extending eligibility to PAWHP will not solely be a fuel poverty measure but will provide reassurance to older people on lower incomes that they can afford to keep warm in the winter months when heating bills are higher, supporting their overall wellbeing. This financial support is particularly important given the significant increase in cost of living.

23. Pensioner households are likely to have a greater need to keep their home warm due to being older and it being harder for them than younger people to regulate their body temperature.^[6] Older people are also more likely to spend more time indoors according to research carried out by Age UK.^[7] We know that living in a cold home can be detrimental to many older people and that reduced muscle mass and poorer circulation can have an impact on the ability to stay warm. This can impact on the immune system, amplifying any pre-existing condition.^[8] Older people are also more likely to live in ‘colder’ and ‘harder to heat homes’.^[9]

24. The 2023 Scottish House Condition Survey found that families (34%) have similar rates of fuel poverty to older households (37%), and other households (32%). When considering extreme fuel poverty, families have a lower rate of extreme fuel poverty (12%) than both older households (25%) and other households (19%).

25. The policy closely aligns with the Scottish Government’s Wealthier and Fairer Strategic Objectives, but also links with the Scottish Governments key priorities to tackle fuel poverty, ensuring financial security in older age as well as supporting people through the cost-of-living crisis.

26. The policy will contribute towards the following National Outcomes:

• Economy: We have a globally competitive, entrepreneurial, inclusive and sustainable economy. This policy will provide continued investment in financial support for older people most in need of support with energy costs in Scotland.
• Communities: We live in communities that are inclusive, empowered, resilient and safe. This additional support recognises older people have particular needs in relation to heating and will help towards ensuring pensioner households on lower income, are living in a warm home.
• Health: We are healthy and active. The policy will provide reassurance to older people on a lower income that they will receive a contribution towards their heating costs, helping to maintain a safe temperature at home during the winter, reducing the health risks due to living in cold environments.
• Human Rights: We respect, protect and fulfil human rights and live free from discrimination. Social Security is a human right and through expansion of this benefit we help progress the support that is available.
• Poverty: We tackle poverty by sharing opportunities, wealth and power more equally. The policy intention of PAWHP is to provide financial support to people of pension age on lower income in Scotland, because they have a greater need for heat during the winter months. PAWHP in particular specifically targets pensioner households who, due to their age, may require an enhanced heating regime, and therefore may incur greater energy costs.