DWP Winter Fuel Payment: Pensioners warned over little-known savings rule

The Government has confirmed it will look again at the eligibility criteria for the £200 to £300 cash for state pensioners

The Government has confirmed that it will review the eligibility criteria for winter fuel payments, which currently provide between £200 and £300 to state pensioners. However, one little-known rule that is unlikely to change could help you claim this benefit.

At present, state pensioners can receive a winter fuel payment if they are eligible for Pension Credit, a means-tested benefit. This change was implemented in 2024 and was criticised by some as being too restrictive, leading to last month's announcement that the eligibility criteria may be revised for winter 2025.

However, one restriction remains - the £10,000 rule for Pension Credit.

State pensioners can apply for Pension Credit if their weekly income is less than approximately £227.

For those receiving the old basic state pension, which pays a maximum of £176.45 per week, even with a full National Insurance record, this could increase your weekly income to nearly the same level as a state pensioner on the new post-2016 state pension.

The Pension Credit amount is £227.10, while the full new pension is slightly higher at £230.25, reports the Express.

But there is another eligibility criterion, not just weekly income: savings. If you have savings above £10,000, your Pension Credit eligibility will be reduced by £1 for every £500 of savings you have above the £10,000 threshold.

The Government's gov.uk site explains: "If you have £10,000 or less in savings and investments this will not affect your Pension Credit.

"If you have more than £10,000, every £500 over £10,000 counts as £1 income a week. For example, if you have £11,000 in savings, this counts as £2 income a week."

It means that if you have too much money in savings, you could be ineligible for Pension Credit and, in turn, unable to claim a winter fuel payment (because you need to claim Pension Credit to claim a winter fuel payment).

While there isn't a fixed limit on savings, if you had, for example, £110,000 in savings, then £100,000 of your savings would be above the £10,000 threshold.

£100,000 is 200 increments of £500, which means the eligibility calculation would equate that to £200 per week income.

If you also had a state pension payment of £176.45 per week, that would be £376.45, and you wouldn't be eligible for Pension Credit or a winter fuel payment.

Of course, your specific circumstances may be different. Your personal eligibility is determined by the income you have from your state pension calculation (based on your NI record), your savings, and other income.

Some types of income are disregarded in calculations, for example, Attendance Allowance, PIP, Disability Living Allowance and some other DWP benefits do not count, as well as any adoption or fostering allowances, a dependant child's income or Scottish Carers Allowance Supplement payments.

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