In 2026, more than 100,000 pensioners are anticipated to lose their Winter Fuel Payment, an important financial aid that assists older citizens with the costs of heating during the winter months. This change is linked to increases in the state pension and other pension-related benefits set for April 2026, which may push many individuals’ incomes above the £35,000 threshold, making them ineligible for this payment.
According to the Manchester Evening News, this shift could see the number of affected pensioners rise to 500,000 by 2029, significantly impacting retirees’ financial stability. The situation highlights the challenges facing pensioners in the coming years.
The £35,000 Cut-off: A Harsh Reality for Some Pensioners
Under the current system, pensioners with an income of less than £35,000 are eligible for the Winter Fuel Payment, which ranges from £100 to £300, depending on circumstances. However, as pension incomes are set to increase, many pensioners will exceed this threshold and lose their entitlement to the Winter Fuel Payment.
The payments, designed to help pensioners during the cold months, are no longer aligned with the rising cost of living as the income threshold has remained frozen. This is a major concern for more than 100,000 pensioners expected to lose their Winter Fuel Payment in 2026 alone, with the number potentially reaching 500,000 by 2029.
Financial experts like former pensions minister Sir Steve Webb have voiced concerns, noting that the increase in pensions might inadvertently push retirees out of eligibility for vital benefits, which undermines the purpose of those very increases.
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 – Webb commented.
Financial Experts Criticize the Cliff-edge System
The cliff-edge system, where individuals just above the income threshold lose their Winter Fuel Payment entirely, has drawn strong criticism. Scott Gallacher, Director at Rowley Turton, argues that it’s “ludicrous” for a single pensioner earning £35,001 to lose the entire payment, while a couple with a combined income of £70,000 may retain their Winter Fuel Payment.
This isn’t just unfair—it undercuts the government’s own growth agenda – Gallacher stated.
Experts like Eamonn Prendergast of Palantir Financial Planning also argue that this approach unfairly impacts single pensioners, who often face higher relative living costs because they bear household bills alone.
Household bills don’t halve just because you live alone, and single pensioners often face higher relative costs. A tapered withdrawal would be far fairer than an all-or-nothing cut-off – Prendergast explained.
He added that the system should account for household income rather than just individual income. Without this, the system risks unfairly penalizing retirees who need the most support. The “blunt instrument” of a £35,000 cut-off has been called more of a “lottery” than a fair system, especially when a widowed pensioner earning £35,001 loses the Winter Fuel Payment entirely, while a couple earning £70,000 may still receive it.
Taxable Benefits and the £35,000 Cut-off
Adding to the complexity of the issue is the fact that some taxable benefits—like carer’s allowance, incapacity benefit, and widow’s pensions—count toward the £35,000 threshold. As a result, pensioners who rely on these benefits may unexpectedly exceed the threshold and lose their payment. This has led Martin Lewis, personal finance expert, to warn that some pensioners might be caught off guard. He explained,
Let’s say you earn £40,000 of taxable income. If you earn £35,000 and a penny, you lose the entire £200. It is not a graduated scheme; it is a cliff-edge scheme.
Lewis also pointed out that the £35,000 threshold includes taxable income from various sources, including investment dividends and taxable state benefits. What’s not counted are things like the Winter Fuel Payment itself, capital gains, or non-taxable benefits like Attendance Allowance and Disability Living Allowance.
