Jeff Salway: Taking vital cash from pensioners a fitting 100-days-in-office marker

HOW apt that the government's first 100 days in power was marked by the revelation that it plans to knock £100 from the winter fuel payments for the over-80s. The coalition's first 100 days has been marked as much by shameless U-turns on pre-election promises (both Tory and Lib Dem) as by a spending cuts agenda that is either radical or sadistic, depending on your view.

The government looks certain to increase the qualifying age for annual winter fuel payments from 60 to 65 and possibly axe the top-up allowance for over-80s in October's spending review, a move that would send even more people into fuel poverty (defined as spending more than 10 per cent of household income on energy bills). Charities say that for households in the 60 to 65 bracket, the loss of the allowance could drive average winter fuel bills from the present 190 to 440.

Many retired women under the age of 65 could be forgiven for taking this personally, given that they also lose out on vital pension assistance. As it stands, retired women between 60 and 65 do not benefit from the higher income tax personal allowance of 9,490 that kicks in for pensioners at the age of 65. So a woman retiring at her state pension age gets the same tax-free income allowance as anyone in work up to the age of 65, a difference currently of 3,015 between their allowance and that of pensioners over 65.

Now retired women between 60 and 65 - a demographic group also characterised by low pension savings - may also lose out on energy bill support that many have come to rely on. Allowances such as these are not luxuries. When benefits are taken away from pensioners there must be a trade-off, preferably an improved basic state pension, but that remains a distant prospect.

Winter fuel allowance shouldn't be a universal benefit so reform is necessary, but that reform has to be considered. Means-testing - one option purportedly on the government's table - may seem an obvious solution. But the example of pension credits and other means-tested payments show conclusively that it's an inefficient way of delivering benefits to older age groups. Many pensioners consider it demeaning to proactively seek benefits, while the form-filling that means-testing typically involves is often complex and time-consuming. More satisfactory would be retaining or increasing the current winter fuel allowances as a universal benefit but applying retrospective taxation on those with taxable income.

Remember that this comes at a time when persistent high inflation and low interest rates deprive many retired people of income from their hard-earned savings, forcing them to eat into their capital and other assets.

Charities consider the winter fuel allowance a lifeline for many pensioners and talk of the cuts as amounting to a death sentence for those forced to choose between heating or eating.

Reneging on pre-election promises is an apt way for the coalition to mark 100 days in power. It's not as breathtaking a U-turn as that on employer national insurance contributions - going ahead as planned by the Labour government despite the pre-election "jobs tax" propaganda - but it's considerably more harmful.