Winter Fuel Payment £375 message as eligibility assessed in expert update

The qualifying rules for the Winter Fuel Payment could be expanded further with more pensioners qualifying for the £300 payment - but one expert says the sum needs to rise to as much as £375.

Labour announced recently that the eligibility for the state pension-age payment was to be expanded. Last winter, you had to be on a certain means-tested benefit to qualify, such as Pension Credit, with payments of £200 or £300 sent out to eligible people.

But the Government has now expanded this to all state pensioners - but if your income is over £35,000, you will have to pay it back.

Tom Blake, founder of Money Saving Guru, said he thinks it was a good decision to move to more generous eligibility rules.

He said: "Expanding eligibility to anyone earning £35,000 or under captures a wide swathe of pensioners on modest or middling incomes.

"It’s a more equitable and evidence-based approach than simply relying on benefit claims - especially given that hundreds of thousands of eligible people don’t apply for Pension Credit."

Some 700,000 pensioners are thought to not be claiming Pension Credit when they could, despite a recent Government push to get people to apply. The average claim provides more than £3,900 a year in support.

Mr Blake also said that the qualifying limit for the Winter Fuel Payment "could possibly go further". He explained: "The £35,000 threshold is reasonable for now, but it might need revisiting as inflation and energy costs evolve.

"There’s also a case for considering household circumstances as single pensioners in high-cost areas can be disproportionately impacted.

"So the eligibility should be open to some nuance - perhaps with the help of local charities to help identify those who might be liable through the cracks."

The finance expert also said that there is a strong case for increasing the amount that is paid out through the scheme, as the £200 or £300 payment has not increased in years despite the recent surge in energy bills.

Mr Blake said: "If the Government wants this support to remain meaningful, it needs to reflect these fluctuations. At the very least, the payment should rise in line with energy price increases; say, a 20-25% uplift when bills jump significantly.

"That could mean raising the payment to around £250 to £375 during high-cost years, to maintain its value in real terms. Without that kind of responsiveness, the payment risks becoming a token gesture, rather than a useful lifeline."

As millions of more pensioners will now qualify for the payment, other experts have called for more attention to increase the take-up of Pension Credit.

The benefit is available to those of state pension age and tops up a person's income, increasing their weekly income to £227.10 for single claimants and up to £346.60 for couples.

If you have an income above these amounts, you may still qualify as there are extra amounts you can get depending on your situation, such as if you care for another adult or have a severe disability.

Stephen Lowe, group communications director at retirement specialist Just Group, said: "Despite the Government confirming that eligibility for winter fuel payments will be widened, this should not distract attention from the important job of work to be done to increase the take up of Pension Credit.

"This benefit is specifically targeted at the poorest retirees, and it remains a concern that there are still hundreds of thousands of pensioners that are entitled to Pension Credit payments but not receiving it.

"Now is not the time to lose momentum on the good progress that has been made in making sure this important benefit reaches the remaining number of pensioners who are eligible for Pension Credit but not claiming."