Travel sweats on Budget to assess full impact of winter fuel payment cut

Meanwhile, MoneySavingExpert founder Martin Lewis points out that while energy bills will fall by around £100 this coming winter, some pensioners face the £200-£300 loss on top of the £300 cost of living payment given to them last winter, which they will no longer receive.

While the vast majority do put their fuel allowance towards their energy payments and stay in the UK, some don’t need to – so before the April pension increase, what will the effect be on travel?

‘Wrong message’

The Travel Network Group believes it may prompt people to downgrade their holiday accommodation or destination, but is wary of the sensitivities.

“I think we would give out the wrong message to talk about holiday budgets when there are pensioners who genuinely need the support to pay for their winter bills,” said Ionela Dinu-Mihai, TTNG’s customer experience and people director.

Kelly Cookes, Advantage Travel Partnership’s chief commercial officer, is also sympathetic. “We empathise with those who will be losing the winter fuel payment this year and, as a result, may have to sacrifice their winter getaway.”

However, unlike TTNG, she said there was evidence it was a factor in winter bookings. “We’ve seen many put these fuel payments towards winter trips to warmer climes and help alleviate the rising costs of gas and electricity.”

Scotland’s bitter winters prompt many to take flight, as Thorne Travel’s Shona Thorne can attest. A couple of winters ago, the Ayrshire agency launched new "beat the gas bill" long-stay packages.

“The government is actually going to help older customers make the decision to go away – that’s the feedback we have had,” she said. “Older customers don’t want to stay here and pay it to the gas man; they’d rather be somewhere else."

Thorne continued: “In the first couple of months, and while they’re still annoyed about it, older clients will make some conscious decisions on whether they want to spend as much.

"But I think that for some clients this has actually reinforced the idea they need to be away for the winter so fuel doesn’t cost them as much.”

Pension boost

Thorne’s clients have also mentioned this year’s large increase in pensions – 8.5% – ahead of next year’s 4% rise. “The customers we are speaking to are saying they feel comfortable right now. Yes, they’re annoyed [about the winter fuel payment], but the government’s decision won’t have a huge impact.”

Over-50s specialist Silver Travel Advisor is also looking forward to April. “The pension increase scheduled for next spring is set to offer a significant financial uplift, helping to alleviate some cost of living pressure,” said marketing manager Marie Broadhurst.

The government also forecasts the state pension increasing by £1,700 over the next five years, so perhaps the future isn’t all bleak – provided inflation stays low. Broadhurst hopes so.

“For some pensioners, it might be more cost-effective to trade heating bills for sunshine abroad. Every winter brings an increase in interest from older travellers looking for longer stays in warmer destinations or who are considering long-haul trips.”

She added factors like higher council tax or changes to pensions could influence decisions, but said Silver Travel’s average selling price was up.

David Sharman, Newmarket Holidays’ commercial director, said the operator allowed clients, who are mainly in the 50-plus age group, to pay by instalments and used low-deposit offers to help spread costs.

“We haven’t seen a decline in demand from our core demographic, even with the potential removal of winter fuel payments,” he said.

Cruise is a natural choice for older clients looking to escape, particularly those with nest eggs. Ambassador Cruise Line chief executive Christian Verhounig, perhaps predictably, said current sales suggested “an affordable quality holiday experience such as an Ambassador cruise, rather than a luxury product, is the right way forward”.

However, he added: "The cost of living crisis impacts us all, but it is too early to gauge how the withdrawal of the winter fuel allowance will affect the older generation."

Generation saver

One consolation for travel is that unlike the younger generation, older travellers are less concerned about instant gratification, with many waiting years to do a trip.

“People of that generation are savers and will have saved to book a holiday, especially if they were planning a once-in-a-lifetime bucket-list trip,” said Richard Lowrey-Heywood from north-east agency Seaside Travel, another optimist.

There are some with cash stashed away, for example Aito clients, whose average spend on a short-haul booking for two is £4,000-£5,000, with long-haul spend soaring to around £13,000.

“The only effect we seem to be seeing is our more wealthy clients saying they are going to spend their money on more holidays before Labour ‘takes it all away’ from them,” said Chris Wright, managing director of Aito member Sunvil.

“They’re moaning about the winter fuel allowance being taken away, but they don’t really need it.”