- Everyone over the State Pension age in England and Wales with an income of, or below, £35,000 a year will benefit from a Winter Fuel Payment this winter.
- This increased threshold means no lower or middle-income pensioners will miss out, with the vast majority – over three quarters – of pensioners in England and Wales receiving the payment.
- Support will continue to be targeted, with pensioners above this threshold having the payment automatically recovered or able to opt out.
Nine million pensioners to receive Winter Fuel Payments this winter as all pensioners in England and Wales with an income of, or below, £35,000 a year will benefit from a Winter Fuel Payment.
This extends eligibility to the vast majority of pensioners, with around 9 million, or over three quarters, benefitting. This threshold is well above the income level of pensioners in poverty and is broadly in line with average earnings, balancing support for lower income pensioners with fairness to the taxpayer
This change will cost around £1.25 billion in England and Wales and see means-testing of the Winter Fuel Payment save around £450 million, subject to certification by the Office for Budget Responsibility compared to the system of universal Winter Fuel Payments.
The costs will be accounted for at the Budget and incorporated into the next OBR forecast. The Chancellor will take decisions on funding in the round at that forecast to ensure the government’s non-negotiable fiscal rules are met. This will not lead to permanent additional borrowing.
No pensioner will need to take any action as they will automatically receive the payment this winter, and for those with incomes above the threshold it will be automatically recovered via HMRC.
The payment of £200 per household, or £300 per household where there is someone over 80, will be made automatically this winter. Over 12 million pensioners across the United Kingdom will also benefit from the Triple Lock, with their State Pension set to increase by up to £1,900 this parliament.
Chancellor of the Exchequer Rachel Reeves said: “Targeting Winter Fuel Payments was a tough decision, but the right decision because of the inheritance we had been left by the previous government. It is also right that we continue to means-test this payment so that it is targeted and fair, rather than restoring eligibility to everyone including the wealthiest.
“But we have now acted to expand the eligibility of the Winter Fuel Payment so no pensioner on a lower income will miss out. This will mean over three quarters of pensioners receiving the payment in England and Wales later this winter.”
Pensioners above the £35,000 threshold will have the full amount of the Winter Fuel Payment they received automatically collected via PAYE, or via their Self-Assessment return.
No one will need to register with HMRC for this or take any further action. Pensioners who want to opt out and not receive the payment at all, will be able to do so, with details to be confirmed.
Making these changes now gives people certainty and ensures that payments can be made in time for this winter. Payments will be better targeted than before 2024-25 when they were previously paid to all pensioners regardless of their income, meaning those on lower and middle incomes will still receive the help they need, ensuring fairness for both pensioners and taxpayers.
Approximately 2 million individuals in England and Wales over State Pension age have taxable incomes above £35,000.
