A chill wind for some
Not everyone’s a winner in the turnaround on winter fuel payments, says Paul Lewis.
All pensioners in England, Scotland, Wales and Northern Ireland will get a winter fuel payment this year, probably in November or December. But about two million will have it taken back next April. The payment remains at £200 for a household where at least one pensioner lives – defined as being born 21 September 1959 or earlier. The payment is £300 if they are over 80 (born 21 September 1945 or earlier). If two pensioners live together they will get £100 each. If one or both are over 80 they will get £150 each.
However, individuals with an income of over £35,000 in the tax year 2025/26 will have the payment taken back by HMRC next tax year, which begins on 6 April 2026, normally via extra tax on other taxable income through PAYE (HMRC say it will all be done automatically). The Government says around two million pensioners will have it taken back, leaving more than nine million who keep the payment. This rather strange approach was the only practical way to get the payment to all who were entitled in time for this winter.
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Last year, of course, a much stricter test was applied. Only pensioners entitled to pension credit got the payment, which normally meant an income below £11,809 a year (or £18,023 per couple), though older pensioners could qualify with slightly higher incomes, as could those with disabilities or who were carers. This has now been scrapped and replaced with a single individual income test of £35,000 or below.
Couples are assessed separately. One person can have an income above £35,000 and lose their half of the payment, while their partner has a lower income and keeps theirs. What is counted is “taxable income” including the state pension, any other pension and rental income (not rent-a-room). All savings interest and dividends are included, but income earned by a tax-free ISA is not. Capital is not assessed at all.
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Scotland has its own Pension Age Winter Heating Payment, and the First Minister has promised “no pensioner will receive less than they would” in the rest of the UK. My blogpost has the latest news on the winter fuel payment: search paullewismoney.blogspot.com for “winter fuel payment”.
