State pensioners who have more than £35,000 to their name can STILL qualify for the Winter Fuel Payment. The Department for Work and Pensions ( DWP ) perk, worth £300, is being brought back for older people born before 1959.

Labour Party government officials and the DWP changes the eligibility criteria in June after a backlash, meaning nine million people will be eligible.

Andy Wood from Tax Natives said: “The government only looks at your taxable income so there are some simple things you can do to reduce this, which means you can qualify for the Winter Fuel Allowance as well as save tax.”

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Mr Wood explained: “Many pensioners may not realise that interest earned on savings held outside of ISAs count towards their total taxable income. With interest rates still relatively high, even modest savings can generate income that pushes someone over the threshold.”

He added: “ISAs offer a tax-free way to keep savings interest out of the income equation. Interest earned within an ISA is never taxed and does not count toward income calculations.

“With the £20,000 cash ISA allowance still available this tax year – and potential changes looming – they remain a smart choice for pensioners looking to protect their eligibility for benefits like the Winter Fuel Payment.”

Mr Wood advised: “Deferring your state pension is an option. However, it’s worth saying that deferring it means you will get a larger state pension when you do come to claim it and this has the potential to push you up into higher tax bands or mean you no longer qualify for benefits you would have otherwise received.”

He said: “You also have to weigh up whether it’s worth losing out on a year’s worth of state pension now in order to claim the winter fuel allowance plus a higher state pension later.

“It’s important not to make any knee-jerk decisions. Delaying claiming your state pension increases your payments by 5.8% for each year you defer.

“However, you will be giving up approximately £12,000 of income a year at current rates, assuming you are entitled to the full new state pension, so it will take some time to recoup that.”