How to boost your chances of getting the Winter Fuel Payment
Millions of pensioners will get the Winter Fuel Payment this year but you’ll need to pay it back if your income is over £35,000. We reveal some tips and tricks to ensure you’re eligible and can keep the payment
Pensioners with an income of £35,000 or less will benefit from the Winter Fuel Payment in late 2026 or early 2027 – but millions are set to miss out.
The Winter Fuel Payment was previously made to anyone of state pension age or older, but in 2024, the government announced it was means-testing the payment. Ministers limited it to those on Pension Credit and other specific benefits, meaning just roughly 1.5 million individuals received one in the 2024/25 winter.
In June 2025, the government changed the eligibility rules following a public backlash, opening the payment up to those with incomes of £35,000 or less.
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Around nine million pensioners in England and Wales received the payment in winter 2025/26, but about two million over state pension age with taxable incomes of £35,000 or more missed out.
The Winter Fuel Payment is worth £200 per household, or £300 per household where there is someone aged over 80. It is typically paid in November or December.
If you’re worried you won’t qualify for the Winter Fuel Payment because you get more than £35,000 of income a year, there are ways to boost your chances of qualifying.
Some don’t even involve reducing your actual income; instead, it’s about smart financial planning.
Helen Morrissey, head of retirement analysis at investment firm Hargreaves Lansdown, tells MoneyWeek: “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.”
1. Move your savings and investments into ISAs
The £35,000 threshold is based on an individual’s taxable income, rather than their total income.
This means one of the first things you should do is ensure you’re making the most of ISAs. Any savings interest you make from cash ISAs or capital gains from stocks and shares ISAs does not count towards your taxable income.
In contrast, interest earned on non-ISA savings accounts, or taxable income from investments, is included.
Morrissey says: “We’ve seen interest rates rise in recent years and with interest on savings held outside an ISA counting as taxable income you might find that this pushes you over the threshold. This is the case even if the interest earned does not breach your personal savings allowance which currently stands at £1,000 for basic rate taxpayers and £500 for higher rate taxpayers.”
For example, £20,000 in a savings account earning 4.5% would make £900 in interest for the year. While this falls within the personal savings allowance of £1,000 for basic-rate taxpayers and isn’t taxed, it’s still considered as “taxable income” and counts toward the £35,000 Winter Fuel Payment limit.
2. Consider Premium Bonds if you’ve maxed out your ISA allowance
If you’ve already used this year’s ISA allowance and you have significant savings where the interest could cause you to breach the £35,000 taxable income limit, consider buying Premium Bonds.
Any Premium Bonds prizes you may win are tax-free, so won’t be included in your taxable income.
Maike Currie, vice president of personal finance at pension provider PensionBee, says: “With a maximum holding of £50,000, Premium Bonds can provide a useful home for cash that might otherwise generate taxable interest.”
3. Take your pension tax-free cash – but beware of taking more
As well as ensuring you can enjoy the gains from your savings and investments without counting towards your taxable income, you should also have a look at your pensions.
Taking the 25% tax-free cash from any workplace or personal pensions can give your retirement income a decent boost, and crucially it’s not taxable income.
However, any other money from pensions, such as via an annuity, income drawdown or a lump sum is taxable.
Morrissey suggests keeping an eye on your pension income and potentially combining pension and ISA income to keep you below the threshold. For example, if you had previously been taking £30,000 from your pensions each year, and also receive £10,000 from the state pension, that works out as £40,000 taxable income.
However, if you reduced the £30,000 to £25,000 income from your pension, and topped up your income with £5,000 withdrawals from your ISA, then you would still have the same £40,000 total income (including the £10,000 from the state pension) – but only £35,000 would be taxable.
Note that the criteria states you can receive the Winter Fuel Payment if your taxable income is at or below £35,000 a year. So, if it’s exactly £35,000, you will still qualify.
Also note that if you are receiving an annuity, it isn’t possible to reduce this income, as it’s a guaranteed pension income for life.
If you are taking lump sums from your pension pot(s), or have set up an income drawdown arrangement, you can reduce the amounts to avoid tipping over the £35,000 threshold.
4. Think about deferring your state pension
As well as ensuring you can enjoy the gains from your savings and investments without counting towards your taxable income, you should also have a look at your pensions.
Taking the 25% tax-free cash from any workplace or personal pensions can give your retirement income a decent boost, and crucially it’s not taxable income.
However, any other money from pensions, such as via an annuity, income drawdown or a lump sum is taxable.
Morrissey suggests keeping an eye on your pension income and potentially combining pension and ISA income to keep you below the threshold. For example, if you had previously been taking £30,000 from your pensions each year, and also receive £10,000 from the state pension, that works out as £40,000 taxable income.
However, if you reduced the £30,000 to £25,000 income from your pension, and topped up your income with £5,000 withdrawals from your ISA, then you would still have the same £40,000 total income (including the £10,000 from the state pension) – but only £35,000 would be taxable.
Note that the criteria states you can receive the Winter Fuel Payment if your taxable income is at or below £35,000 a year. So, if it’s exactly £35,000, you will still qualify.
Also note that if you are receiving an annuity, it isn’t possible to reduce this income, as it’s a guaranteed pension income for life.
If you are taking lump sums from your pension pot(s), or have set up an income drawdown arrangement, you can reduce the amounts to avoid tipping over the £35,000 threshold.”
5. Transfer income-generating assets to a spouse with less income
Another way to reduce your taxable income is to move assets to a spouse or partner whose income is below the £35,000 threshold.
For a couple where one person has an income above £35,000 and one has an income of less than this amount, they will both get the Winter Fuel Payment (which is £100 each, or £150 if one person is over 80), but the higher earner will have to pay theirs back.
So, if one of you has taxable income of £40,000 and the other has £20,000, by shifting £5,000 of income to the lower income partner, you can still enjoy £60,000 total household income together – and both keep the Winter Fuel Payment.
Currie explains: “Where appropriate, holding savings in the name of the lower-earning partner may reduce the amount of taxable interest attributed to the higher earner, but only where this reflects a genuine transfer of beneficial ownership. The tax implications can be complex, so it’s worth taking independent financial advice before making any changes.”
6. Don’t worry about certain benefits adding to your income
Many benefits are not taxable, so you can receive them without worrying they’ll contribute to the £35,000 limit.
Sarah Pennells, consumer finance specialist at retirement firm Royal London, points out that Attendance Allowance, which is not means-tested and is paid to people over state pension age to help with extra costs if they are ill or disabled, is not taxable. Neither is Pension Credit and the Winter Fuel Payment itself.
However, some are, such as Carer’s Allowance (or the Carer’s Support Payment in Scotland). So, remember to include the taxable ones when calculating if you’re at risk of losing the Winter Fuel Payment.
7. Claim expenses on rental income
Landlords can deduct expenses from their rental income to reduce their taxable profit and total income, Currie, from PensionBee, points out.
Just make sure that the expenses you are deducting are solely for the purposes of renting out a property.
Some expenses you can deduct from your rental income include: general maintenance, letting agent fees and buildings insurance.
