U turn on winter fuel payments- is it a good move?

Ok, 10 quid on that it "U turn" will appear in a headline tomorrow morning? Any takers?

You should be paying tax on £30 a year if that is your total income.
Personal allowance is £12,700, according to Google.

I think there’s going to be an opt out option for those with £35k or more per year, to save the tax-code changes (?) to claw back their WFA payment.

Withdrawal of the univeral winter fuel payment was an open goal that happened to present itself at the time.

Had Sunak called the election a little later, this couldn’t have happened in the way that it did. As it was, the new government had to rush through secondary legislation while Parliament was in recess to make it law. As it result there was no no impact assessment and no formal scrutiny by the Social Security Advisory Committee (SSAC).

As a social experiment to get more households to claim Pension Credit, it has largely failed. The number of households now in receipt of PC has increased by fewer than 50,000 compared to before the change. As 780,000 household were said be eligible and not claiming, that’s clear proof that the barriers to claiming remain. It’s often the most vulnerable who don’t claim.

If I were the Minister, that’s how I would justify the reversal. We tried to increase PC uptake. It didn't work very well. It’s better to reinstate the safety net.

This is essentially what happened in 1997/98 when the payment was first introduced by Gordon Brown.

There were two rates, £20 for all households but £50 for those in receipt of Income Support. It was hoped then that many more households would claim IS to get the extra £30. They didn’t, so the payment was first increased to £100 in 1999 for all households, then increased to £200 in 2000. The extra £100 when someone in the household is 80 was introduced in 2003.

See page 9:

researchbriefings.files.parliament.uk/documents/SN06019/SN06019.pdf

The payment hasn’t kept up with inflation. Had it done so £200 would be nearer £400 now.

Savings have come from the women affected by SP equalisation who had to wait up to six more years to receive the payment.

In real terms, the cost of paying univerally has remaned static. See page 5 of the linked document.

Payment is per household. In a household receiving £200 where both are pension age so receiving a £100 each, only the person whose income is more than £35,000 will have the £100 clawed back through the tax system.

Martin Lewis explains:

www.moneysavingexpert.com/news/2025/06/winter-fuel-payment-criteria-confirmed/

He explains how this differs from the clawback of Child Benefit was high earners - which suggests there night be some change to that.

There will be an option to opt out of receiving the payment.

As I’ve said repeatedly, and it's in the paper, it was never mandatory to spend the payment on fuel. In fact it’s far better in terms of Treasury yield if people spent it on something else. Spend it on fuel - tax yield 5%. Spend it on Christmas wine - tax yield over 50%. Most other things in between - tax yield 20%. Public spending creates taxation.

As most people on-grid spread their annual energy costs evenly over 12 months now, are effectively forced to through the direct debit system, in reality, most people are physically spending the payment on something to do with Christmas. Once it's in someone's bank account who can say what it's spent on anyway?

As ever, Silverbrooks, your go-to fact provision has whats needed!

Doodledog

I think it is a brave move, as it is inevitable that even those who moaned when the WFA was cut will now moan about its reinstatement.

I don't think that people (including politicians, but also parents, managers and so on) should dig their heels in 'because I've said so' rather than listen to those who disagree and adapt if they feel critics have a point.

I don't know what I think about the new move as we haven't had the detail yet. Is the £35k limit a personal one or a household one, for instance? How will it be reclaimed if a person/household has income above that? Will HMRC be able to link couples' incomes?

Is the £35k limit a personal one or a household one, for instance? How will it be reclaimed if a person/household has income above that? Will HMRC be able to link couples' incomes?

Interesting questions.
With the old WFA , the higher amount was age dependent, so DH got that and I received the lower amount.

Usedtobeblonde

I didn’t realise anyone paid tax on WFA.
Has it always been added to income before.
To Cuberbug, you should receive it as your income is way below the level quoted Tax on £12,600 should be very little.

It wasn’t taxed previously. If I understand it correctly, people with a total income over £35,000 will have the full WFA removed through tax from this winter. It’s a lot easier just to opt out if that is going to be an option, if your total income. Otherwise it will be clawed back at the end of the tax year no doubt, which is messy.

Thanks Silverbrooks

Usedtobeblonde

I didn’t realise anyone paid tax on WFA.
Has it always been added to income before.
To Cuberbug, you should receive it as your income is way below the level quoted Tax on £12,600 should be very little.

They don't.

Lots of 'frothing' going on over on 'Mumsnet'

keepingquiet

Wonder how many people will post now they got what they wanted?

I will certainly be eligible if it's for those on less than £25 000 pa.

However, on the news now it's just more government baiting... seems they can't do right for doing wrong...

£35,000 keepingquiet. I am very pleased with this as that is the mean for working incomes I think (I haven’t double-checked). We need to look after those on middle incomes as they are the working drivers of growth and we need them to be able to look forward to a reasonable retirement.

What we don't seem to have been told is if there is an eligability level for savings. I hope they raise this from the £10,000 for Pension Credit. I've thought that was too low for some time particularly for home owners who have to pay for the upkeep of their houses.

I think both last year and this are right. The Conservatives set out to stop Labour from making the changes the had set out. Leaving so many promises unfunded was just anti-democratic. The money had to come from somewhere and the BabyBoomers have, overall, done very well over the years. I think helping fill that black hole was a good thing for Pensioners to do.

Now they are adjusting but taking away an unaffordable universality. That seems okay to me. Of course, the proof of the pudding is in the eating so we will have to wait and see.

I'm sticking with the great increase from 10% to the 75% and look forward to it appearing in certain papers..or not...

It wasn’t really a U turn, even though that’s sn eye catching headline. It was at best a moderation of the levels at which you can claim.
The savings will probably used to pay for free breakfasts for all children, (except those at private schools) whether their parents can afford to feed their children or not.

Doodledog

Calendargirl

A pity this wasn’t what was done in the first place.

Of course it’s ’flip flopping’, this has only happened because of the negative response to the original plan.

No idea how it will all work.

Is 'flip-flopping' a good or bad thing, in your opinion? Should governments stick to decisions that the people they represent clearly dislike 'just because', or should they have the humility to change their minds?

Agree Calendargirl

You don’t seriously think this change was effected by any humility do you Doodledog? 😄
It was wrong in the first place to take it away from those just above the threshold for lots of benefits and was politically a crazy thing to do. What they’re doing now is much better in every way.
It’s only being done with great reluctance and the reason given by RR that we’re in a better place economically is just laughable. At least give us the courtesy of being honest Rachel!

It will be paid to all pensioners and clawed back through tax for those above the threshold.
“ The money will be paid all pensioners, but then clawed back from the wealthiest through increased tax payments. Pensioners who are eligible can also opt out and not receive the payment at all.”.

I wonder if this is being done to introduce more tax payments from pensioners?

Wyllow3

Ok, 10 quid on that it "U turn" will appear in a headline tomorrow morning? Any takers?

I’ll take that bet Wyllow and I’ll up it £20 that we’ll see a “massive U turn” headline

nanaK54

Lots of 'frothing' going on over on 'Mumsnet'

😂
Wait until they’re old and grey!
I’m not a pensioner as yet, but my Mum will be well pleased by the U turn as she was very worried by the loss of the money.
And before anyone asks if she really needs it, the answer is yes.

LizzieDrip

Wyllow3

Ok, 10 quid on that it "U turn" will appear in a headline tomorrow morning? Any takers?

I’ll take that bet Wyllow and I’ll up it £20 that we’ll see a “massive U turn” headline

That because it really is a massive U turn! 😁

Mollygo

It wasn’t really a U turn, even though that’s sn eye catching headline. It was at best a moderation of the levels at which you can claim.
The savings will probably used to pay for free breakfasts for all children, (except those at private schools) whether their parents can afford to feed their children or not.

Lots of 'frothing' going on over on 'Mumsnet'

The savings will probably used to pay for free breakfasts for all children, (except those at private schools) whether their parents can afford to feed their children or not.

Perhaps Mumsnetters need to be reminded of that!

I am an advocate of free school lunches btw.

PoliticsNerd

I think both last year and this are right. The Conservatives set out to stop Labour from making the changes the had set out. Leaving so many promises unfunded was just anti-democratic. The money had to come from somewhere and the BabyBoomers have, overall, done very well over the years. I think helping fill that black hole was a good thing for Pensioners to do.

Now they are adjusting but taking away an unaffordable universality. That seems okay to me. Of course, the proof of the pudding is in the eating so we will have to wait and see.

Maybe you’d enjoy filling that mysterious black hole yourself? I see you have swallowed Starmer’s line in that the money had to come from somewhere so let’s soak the oldest.
Taxes could and should have gone up from the outset of Labour taking office, that was the best and the fairest thing to do for all concerned.

I see you have swallowed Starmer’s line in that the money had to come from somewhere so let’s soak the oldest.
And that there is a "black hole" as claimed by Ms Reeves which has been disputed by other experts.

Thanks very much Reform! If it wasn’t for them “feeling Labours collar” this would have never happened. 😂

Poppyred

Thanks very much Reform! If it wasn’t for them “feeling Labours collar” this would have never happened. 😂

Rubbish!

growstuff

Doodledog

This is from the press release:

"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."

Thanks. I clearly didn't read very closely 😂. I was getting ready to come home after some time away, so was doing lots of things at once.

As I said above, I think that's probably fairer, although potentially a household of two people with almost £70k coming in in pensions will get it when another with £36k and one person will not. Still, £35k is a decent threshold, so nobody should have to go cold.

Oreo You don’t seriously think this change was effected by any humility do you Doodledog? 😄

I think that there are people of a certain mindset who are incapable of changing their minds as they see it as 'backing down' or a 'U turn', and just as I think that is arrogant, I see those who are prepared to say 'ok, I've reconsidered and agree that this was a bad move' are doing so from a position of humility, yes. Laugh at me if you will, but I am as entitled to my view as you are.

It’s only being done with great reluctance and the reason given by RR that we’re in a better place economically is just laughable. At least give us the courtesy of being honest Rachel!
I don't think it's possible to know why other people do what they do with any degree of certainty. If there is a pattern of dishonesty or serial infidelity or whatever, we can think that they are acting true to form, but I think that accusing people of being dishonest because we think we know others' minds better than they do is, well, presumptuous at best. If someone is caught in an actual lie - eg saying they haven't done something they are proved to have done (or whatever), then fair enough, but ascribing motives to others is a different thing.

The trouble with the 'U turn' accusation is that it makes it all the more difficult for people to change their minds. It works against their detractors if genuine concerns can't be addressed without jeers of 'flip-flopping' and 'U turning' and accusations of weakness. I've always felt that accepting apologies with grace is as important as losing gracefully. There is rarely anything to be gained by mocking and derision.