Latest news with #WinterFuelPaymentU-turn
Daily Mirror
11 hours ago
- Business
- Daily Mirror
Millionaires may be eligible for Winter Fuel Payments in new rules
The Winter Fuel Payment U-turn could open up an unexpected loophole for wealthy retirees After facing severe backlash for cutting back Winter Fuel Payments shortly after winning the election last year, the Labour party has made a U-turn. Announcing new rules to means-test the seasonal benefit to assure vulnerable retirees are helped through the harshest months. To be eligible for the Winter Fuel Payment, which offers either £200 or £300 every winter to help cover heating costs, people over state pension age will need to have a taxable income of under £35,000 per year. Experts at Forbes Dawson warned: 'Although this may seem like a sensible approach, as many pensioners are asset-rich but have relatively low levels of income this could have unintended consequences and exclude many 'poor' people. 'Wealthy pensioners are generally in a unique position to control their level of taxable income on a year-to-year basis. Most pensioners will generally have some control over the amount of taxable income they extract from their pensions on an annual basis and many pensioners will have no 'income' and live off their built-up capital.' However, the experts added: 'We are not seriously suggesting that wealthy individuals will manipulate their income just to enjoy a £200 benefit, there will be cases where the very wealthy still qualify, while more deserving cases go without.' To break it down, the finance experts shared a fictional example of a retired NHS consultant called Dr Sam who has an estate worth £5million and makes specific moves with his money already in order to cut down a future Inheritance Tax bill. Including making loans to his Family Investment Company that sits outside his estate. As none of the shares are held by him directly, he doesn't pay tax on it and instead gets £200,000 annually as a repayment on his loan to the company. So while his general income is sitting at six-figures, his taxable income is zero so he will qualify under the new Winter Fuel Payment rules. In another fictional example, the money experts pointed out how people with less assets in retirement don't have as much control over their finances and might be excluded from the benefit. Retired teacher Doris uses a defined benefit public sector pension which is taxable income. She gets £40,000 a year from it, roughly £2,600 after tax, and with little money elsewhere she is reliant on nearly every penny so she can't cut it down. Because of her taxable income, she will not qualify for the benefit despite getting £160,000 less each year than Dr Sam. The new rules will make nine million more pensioners eligible for Winter Fuel Payments. And people can still opt out of receiving it but will need to do so before 15 September, 2025. Eligible people over state pension age will be receiving £200 between November and December 2025. Meanwhile those over the age of 80 who are eligible will receive £300.
The National
10-06-2025
- Business
- The National
'We saw Labour winter fuel U-turn on social media', SNP minister says
Speaking to the BBC on Tuesday morning, Shirley-Anne Somerville said the lack of communication from the Labour administration in London was 'no way for the governments to work together'. It came after Chancellor Reeves confirmed on Monday that the Winter Fuel Payment, which she cut back soon after taking power, would be largely reinstated, with payments of £200-£300 to every pensioner household with an annual income below £35,000. READ MORE: SNP urge Rachel Reeves to abandon disability cuts after winter fuel U-turn Asked about the U-turn, Somerville said it was a 'mistake to try and take money away from pensioners in the first place'. She went on: 'The U-turn is welcome, but I think it points to a rather shambolic way to make policy, which does have implications on the Scottish Government because we're in a system where we are inextricably linked to spending decisions, policy decisions from Westminster. 'It's very difficult to try and run a devolved social security system when you're actually finding out some of the details on social media before you can actually find out the details from the Government. 'Now, that's no way for the governments to work together, and I'm deeply disappointed – welcoming the U-turn – but deeply disappointed in the way that the UK Government have handled this once again with the Scottish Government.' Chancellor Rachel Reeves (Image: Jordan Pettitt/PA Wire) Since the U-turn from Reeves, Labour have been pushing for the SNP to 'triple' the Winter Fuel Payment in Scotland, which is set at a baseline of £100. However, Somerville said that people on pension credit in Scotland would already get payments similar to south of the Border. She said that people who are not on pension credit would get £100, people on pension credit and under 80 would get £203, and people on pension credit and over 80 would get £305. Asked if the SNP might up the payments due to the extra funding which is set to come from Labour's U-turn, Somerville said: 'We are still waiting for the confirmation of whether there's any funding implications from the Chancellor's announcement yesterday, with no details of how that scheme will work.' 'We have no idea what the implications will be,' she added. Somerville further said she hoped the Chancellor would use her Spending Review on Wednesday to also reverse £5bn cuts to disability benefits and to end the two-child cap on benefits. READ MORE: What does the Winter Fuel Payment U-turn mean for Scottish pensioners? 'I hope that the Labour Chancellor will do that,' she said. 'That's the right thing to do. She has the opportunity again tomorrow, and I hope she doesn't turn her back on it once again.' Scottish Secretary Ian Murray, also appearing on BBC Scotland on Tuesday, said the UK Government would 'never' consult devolved governments on devolved policy. Asked if cutting the Winter Fuel Payment after taking power had been a 'mistake', Murray said: 'No, it was the right thing to do at the time.' He insisted that the U-turn is only possible because the UK's economy is improving – an assertion which has been questioned by experts. Pushed on why the Labour Government had not informed the SNP administration of its policy plans or their implications, Murray dodged the question. Scottish Secretary Ian MurrayAsked again, he said: 'How much extra the Scottish Government are going to get? Well, of course it would be Barnett Consequentials on that, which will be calculated in the usual way at the usual time when the policy is finalised.' Murray was then pushed again on whether 'Social Justice Secretary Shirley Anne Somerville is correct when she says that they're trying to to develop policy here, but they never know what's happening at a London level'. The Scottish Secretary said: 'Well, hold on a second, we never consult the Scottish Government on policy that is devolved. 'And if we did consult the Scottish Government on policy that was devolved to be screaming blue murder at the fact that we're encroaching on the devolution settlement. READ MORE: 'Resign if you disagree so much', Labour tell civil servants raising Israel concerns 'This is a devolved payment. There's lots of social security that is devolved in Scotland … the Scottish Government had through the Budget last year received … a £50bn settlement, the largest in devolution's history. 'It's up to the Scottish government under devolution to decide how they spend that. We've got one in six Scots on the NHS waiting lists, so they're not spending on the NHS. 'We've got an increasing educational attainment gaps, so they're not spending it on education. 'So Scottish voters were very right to ask where the money is being spent and why is it not being spent on their priorities.'
