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 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.
ENDS
Notes to Editors
- Eligibility is based on a person's age and place of residence
during the qualifying week (the third full week of September).
For winter 2025/26, the qualifying week will be 15 to 21
September 2025.
- A person needs to have reached State Pension age by the end
of the qualifying week to be eligible.
- Winter Fuel Payments are worth £200 per household, or £300
per household where there is someone over 80. Shared payments are
made to pensioners not on an income-related benefit.
- The payment will be recovered from individuals via HMRC based
on their individual taxable incomes. There will be no need for
household incomes to be aggregated.
- It will be recovered via PAYE for the vast majority, or in
their Self-Assessment tax return for the minority who file and
pay their taxes in this way. HMRC will work closely with
representative bodies to ensure the process is as simple as
possible with clear guidance for taxpayers.
- For those who would like to opt out from receiving the Winter
Fuel Payment, DWP will develop a simple system to enable
individuals to do so, removing the need for HMRC to recover the
payment. Further information will be on gov.uk in due
course.
- The government will be publishing an equalities analysis
alongside the legislation and a Tax Information and Impact Note
at Budget.
Further background
- As of winter 2024/25, Winter Fuel Payments were restricted in
England and Wales to pensioner households receiving Pension
Credit or certain other income-related benefits.
- It is worth £200 for eligible households, or £300 for
households with someone aged 80 or over. It is a
non-contributory, household payment to support pensioners during
the colder months.
- From 2025/26 Winter Fuel Payments will be payable in England
and Wales at £200 for households including someone between State
Pension age and 79, and £300 for households including someone
aged 80 or over. Where the household is not getting an income
related benefit, such as Pension Credit, a shared payment will be
made – e.g. a couple, each under 80, not on Pension Credit will
receive a payment of £100 each.
- Winter Fuel Payments are transferred in Northern Ireland. The
policy area is devolved to Scotland. The Scottish Government and
the Northern Ireland Executive will both receive a mechanical
uplift in their funding as a result of this change in England and
Wales.
