The Winter Fuel Payment is a universal payment made to all UK households where the primary occupant is over 60 years of age. Introduced in 1997, it is intended to offset the cost of domestic heating for older people and thereby reduce the risk of fuel poverty and attendant impacts on health in this section of the population. However, as a non-means-tested benefit, it is available to more affluent households who have no need of the supplement. In addition, no conditions are attached to its receipt, so that beneficiaries do not have to use it to defray domestic energy costs. In a period of rising fuel prices, the question of how to make the best use of such resources is key.
Key research Question
The research team wanted to determine whether a specific methodology could successfully incentivise older households to spend their Winter Fuel Payment on energy efficiency measures and what lessons exist for policy-makers and practitioners of this type of ‘invest to save’ approach.
Summary of activity
Prior to implementing the ‘Warm for Life’ project, the research team ran a focus group attended by 10 members of the public in receipt of Winter Fuel Payments for 2008/09, as well as workers from NEA, Norwich City Council and Warm Front. This sought to capture views on a range of issues such as winter fuel payments and knowledge of and attitudes towards energy efficiency and affordable warmth, as well as highlighting examples of products designed to reduce energy use. Participants were also asked to provide comments on the proposed model of the ‘Warm for Life’ project and complete a feedback questionnaire.
In addition, a questionnaire was sent to Home Energy Conservation Act officers, third sector organisations and staff at agencies in regular contact with older people (e.g. Care and Repair) across the UK to gather views on the effectiveness of winter fuel payments and how they could deliver better value for money. Seventy responses were received.
Thirteen households were initially recruited to the study. Each property was subjected to an inspection based on the Reduced Data Standard Assessment Procedure methodology to assess its energy performance, including its Standard Assessment Procedure rating, running costs and CO2 emissions. These inspections were used to guide specific efficiency recommendations. Inspections were completed before and after the installation of recommended measures to calculate any changes in energy use and cost savings. Households who agreed to participate were provided with a prepaid debit card on which were loaded both the Winter Fuel Payment and an additional £100 from Norwich City Council. They were assigned a caseworker who would help them identify energy efficiency measures on which the funds could be spent. Alongside these quantitative measurements, the households received ongoing advice and guidance on areas such as shopping around for energy tariffs, how to set up direct debit payments, etc.
The preliminary survey of workers found a general belief that the current system of winter fuel payments is not well targeted or cost-effective. Attendees at the focus group displayed only a partial awareness of the energy efficiency measures available and the potential savings but were broadly positive about the ‘Warm for Life’ model. Despite positive attitudes towards the idea from both professionals and older people, there was only limited take-up of the ‘Warm for Life’ scheme. Recruitment fell well short of the initial target of 20–30 households, and attrition among those participating meant that only seven were still involved at the end. This was attributed to a combination of factors, including a perception that the model was overly complex, confusion with other programmes and practical difficulties in managing the payment cards used as incentives. However, such challenges could have been addressed with better support from caseworkers and enhanced coordination with energy suppliers and installers. Even among those households that participated, only a minority of the recommended energy efficiency measures were actually installed; as a consequence, the potential energy and cost savings were not maximised. The actual savings were outweighed by the cost in worker time.
The ‘Warm for Life’ model could provide a way for winter fuel payments to deliver long-term gains regarding fuel poverty and energy efficiency, but it should be integrated into a single national mechanism for improvements (potentially as an ‘opt-in’). If similar projects are delivered in the future, they must ensure greater clarity and consistency of information, preferably with less detail.
The onus to participate should be rebalanced away from households. Frontline workers should be equipped with the knowledge to guide and support households effectively, particularly with information. Resources must allow workers to have adequate time to dedicate to their role.
A careful assessment must be made of whether particular elements will prove challenging for older people (e.g. the use of technological solutions).
In the design phase of national energy efficiency schemes, the potential for incentivising the use of winter fuel payments on energy efficiency measures should be investigated. However, further research is needed to test the most effective methods on larger samples.
‘Warm for Life’ – An Investigation into the Effectiveness of the Winter Fuel Payment System as a Means of Tackling Fuel Poverty and the Delivery of an ‘Invest to Save’ Winter Fuel Payments Pilot Project