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In a significant policy shift, the Department for Work and Pensions (DWP) has confirmed which pensioners will not receive the £300 Winter Fuel Payment under the updated rules for 2024/25.
This change marks a reversal of last year’s controversial means-testing policy, which initially reduced the number of eligible pensioners. Read on for all the details on who qualifies and who misses out.
What is the Winter Fuel Payment?
The Winter Fuel Payment is an annual government grant given to eligible pensioners to help with their energy costs during the colder months.
The payment, which is typically distributed in November or December, can be as much as £300 for pensioners over 80 years old.
Traditionally, it was automatically given to everyone over the state pension age. However, in the 2024/25 period, the means-testing rules will affect who gets the payment.
What Changed in 2024/25?
Previously, all pensioners over the state pension age were automatically eligible for the payment. However, last year, the government introduced a means-tested approach to reduce costs.
The new rules aimed to target the most vulnerable pensioners, but this policy drew criticism. As a result, a U-turn was made, allowing a larger group of pensioners to receive the payment, but not without some key exceptions.
The Group Excluded From Receiving the Payment
Pensioners with an income over £35,000 will not qualify for the £300 winter fuel payment under the updated rules.
This group includes approximately two million individuals in England and Wales. For these higher-income pensioners, the payment will be automatically reclaimed through HMRC via PAYE or their self-assessment return.
This ensures that no one needs to take any action to repay the sum.
Who Will Get the Winter Fuel Payment in 2024/25?
The revised winter fuel payment policy means that pensioners with incomes of £35,000 or less will automatically qualify for the £300 payment.
This includes around nine million pensioners in England and Wales, which amounts to over three-quarters of the pensioner population.
This expansion of eligibility will cost £1.25 billion but is expected to save approximately £450 million by targeting higher-income pensioners who will need to pay the amount back.
The payment will remain the same as before: £200 per household, with an extra £100 for pensioners over the age of 80.
Eligibility Criteria and Payment Details
| Eligibility | Details |
|---|---|
| Income Threshold | £35,000 per year or less |
| Payment Amount | £200 per household, £300 for over 80s |
| Automatic Payment | Yes, no action required for qualifying pensioners |
| For Higher-Income Pensioners | Amount reclaimed by HMRC via PAYE or self-assessment return |
| Cost | £1.25 billion for England and Wales |
How the Winter Fuel Payment Will Be Funded
The payment is financed through means-testing and the reclaiming of funds from pensioners above the income threshold.
The government assures that this approach will help meet fiscal targets without increasing permanent borrowing.
According to Chancellor Rachel Reeves, this decision was necessary due to the inheritance from the previous government.
Although this was a difficult choice, it is seen as a fair approach to ensure those with lower incomes benefit most.
What Happens to Higher-Income Pensioners?
For those earning above £35,000, the payment will be reclaimed by HMRC. There’s no need for pensioners to take action or get in touch with HMRC—the amount will be deducted automatically from their tax returns.
If a pensioner wishes to opt out of the payment entirely, they will have the option to do so, with further guidance expected to be provided later.
Impact on Pensioners Across the UK
This change means that the government has committed to reaching a wider pool of pensioners, ensuring that more people will receive financial assistance to help with winter energy costs.
However, for some individuals, particularly those with higher earnings, there will be no direct benefit.
In summary, while the DWP has expanded eligibility for the Winter Fuel Payment to a broader group, pensioners earning over £35,000 will not receive the £300 payment.
Instead, the amount will be reclaimed via HMRC, ensuring fairness and helping the government meet its fiscal goals.
FAQs
Who qualifies for the Winter Fuel Payment under the new rules?
Pensioners earning £35,000 or less will automatically qualify for the £300 Winter Fuel Payment.
Will I have to take any action to receive the payment?
No, eligible pensioners will automatically receive the payment with no action required.
What happens if my income exceeds £35,000?
Pensioners with income over £35,000 will not receive the payment but will have the amount reclaimed through HMRC.