Earning just £1 above £35,000 could lead to a headache for older people, state pensioners have been warned.
State pensioners face HMRC ‘nightmare’ after breaking rule by £1
State pensioners have been warned they need to give up their Winter Fuel Payment if they earn more than £35,000. Earning just £1 above £35,000 could lead to a headache for older people, state pensioners have been warned.
Pensioners who have an yearly taxable income of £35,000 or more aren’t eligible but are still given the cash, with the HMRC recovering it later through the tax system.
Those looking to opt out can do so through a simple process online, but the deadline for doing so is September 15. John Havard, a consultant at tax advice firm Blick Rothenberg, said returning the money “will be a complex process, and just £1 of income above the £35,000 limit is enough to trigger a clawback, those in favour of a simple life will need to opt out of WFP before the deadline.”
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“You can formally opt out of receiving WFP on the Opt out of Winter Fuel Payment page on the gov.uk website,” Mr Havard said. “But you must live in England, Wales or Northern Ireland to do so.
Mr Havard says for pensioners whose income is “even slightly above £35,000 and you are age-qualified for the Winter Fuel Payment, it is worth acting now to avoid an unnecessary and potentially complex tax clawback process”.
The Winter Fuel Payment is a tax-free Government grant given to eligible pensioner households to help pay for heating costs over the winter months, Money Saving Expert – the site from BBC and ITV star – Martin Lewis said.
The scheme had previously given up to £300 each winter to ALL households with someone at state pension age.
However, from winter 2024/25, it was restricted to those on Pension Credit or certain other benefits. The Winter Fuel Payment will be paid to everyone in England and Wales born before 22 September 1959.
Households will get an automatic payment of either £200 per household, or £300 where there is someone over 80 in the household.
Yet if you earn over £35,000, the payment you get will be recovered through the tax system.