Millions of state pensioners are set to see their monthly pension payments reduced under a rule linked to Andy Burnham, as the government claws back Winter Fuel Payment cash from elderly people who no longer qualify for the benefit.
As part of a Department for Work and Pensions (DWP) plan, the taxman will collect repayments of up to £33 a month from April next year. The measure is part of DWP rules around reclaiming Winter Fuel Payment money from pensioners who are no longer eligible.
Who is affected by the cut?
The change applies to around four million over-65s deemed too wealthy to qualify for the winter allowance. Although the cash is initially paid to all pensioners, the taxman takes it back in instalments from those who do not qualify over the following year.
For a £200 payment, this works out at £17 a month this year, rising to £33 a month from April. Winter support was previously universal for all over-65s but is now linked to income, with a £35,000 income threshold in place. The cash is paid into bank accounts every November.
How the repayment works
The Government explained: "If your total income is over £35,000, you’ll need to pay back the payment. HMRC will automatically collect the payment through your tax code unless you already file self-assessment tax returns."
"This means we’ll change your tax code for the 2026 to 2027 tax year. For a typical payment of £200, we’ll deduct approximately £17 per month. In the 2027 to 2028 tax year, we’ll deduct approximately £33 per month for a typical payment of £200. This is because we’ll be collecting your payments from 2026 and 2027. It will then return to approximately £17 per month for the 2028 to 2029 tax year."
Overall state pension still rising
Overall state pension payments will still go up each year under the terms of the triple lock. The full state pension is on course to rise to over £13,000 a year from April 2027.
