Karmactive Staff
More than 100,000 pensioners are set to lose their Winter Fuel Payment next year as their incomes cross the £35,000 threshold due to pension increases. The government restored Winter Fuel Payments in June 2025 to pensioners with incomes below £35,000, following public backlash against strict means-testing. But analysis from pension experts shows this help will soon be out of reach for thousands more elderly people each year.
Pensioners currently receiving the payment will lose it in 2026 when routine inflation-linked increases push their incomes above the frozen £35,000 limit. The state pension is expected to rise by 4.7% in April 2026 under the Triple Lock, while workplace pensions typically increase by around 4% annually to match inflation. Former pensions minister Sir Steve Webb, now a partner at consultancy LCP, describes the situation as a “rollercoaster” for affected pensioners.
“The new £35,000 cut-off for Winter Fuel Payments is set to be frozen for years to come, meaning that the policy will bite progressively harder as inflation-linked increases in other pensions cause people to cross the £35,000 line,” Webb explains. LCP’s analysis suggests this effect will worsen yearly if the threshold remains unchanged, potentially affecting up to 500,000 pensioners within four years.
Webb questions the fairness of this approach: “Given that inflation-linked increases are simply designed to maintain people’s standard of living, it is hard to see why they should be treated as making people ‘better off’ and hence less deserving of a winter fuel payment.”
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Currently, Winter Fuel Payments provide £200 per household for those under 80, and £300 for households where someone is aged 80 or older. The payment helps vulnerable older people cover heating costs during colder months.
Pensions minister Torsten Bell confirmed in June that the government has no plans to increase the £35,000 threshold. This creates an unusual situation where many pensioners will first lose their payments under the previous strict rules, then have them temporarily restored, only to lose them again as pension rises nudge them over the limit.
Around nine million pensioners – approximately three-quarters of all retirees – will receive Winter Fuel Payments this winter under the current eligibility rules. The system works through automatic payments followed by HMRC recovery from individuals with annual taxable incomes over £35,000.
Scotland operates a separate but similar system called the Pension Age Winter Heating Payment, while Northern Ireland follows England and Wales’ eligibility rules. For pensioners worried about heating costs, other support remains available, including the Warm Home Discount scheme worth £150 and Cold Weather Payments during extended cold periods.
The Department for Work and Pensions estimates the Winter Fuel Payment will cost around £1.25 billion this year, with the current income threshold saving approximately £450 million compared to universal payments.
