Plans are being looked at to recover the cost of winter fuel payments through the taxation of high-income pensioners, according to the Financial Times.
Last year the government decided to scrap the winter fuel benefit for individual pensioners who earned over £11,800 or £18,000 as a couple.
The move denied 10 million pensioners the benefit last winter.
The full state pension is £11,973 a year.
Unpopular policy
The winter fuel payment cull was unpopular with voters including many Labour MPs.
The government has since been bruised following local elections when many voters turned to Reform UK.
Last week the Prime Minister announced a policy U-turn with the government now looking at how the change could be funded.
A “number of options are being considered,” he said, a tax hike being one of them, according to an official.
Conservative approach
The similar approach was taken by the Tories when they reduced eligibility to child benefit for better off parents. Controversy followed in 2010, resulting in several high-profile tribunals.
The winter fuel benefit is worth between £200 and £300 for each recipient.
Impact in the West Midlands
According to the Department of Work and Pensions, as at winter 2023/24, approximately 776,467 households in the West Midlands region received the winter fuel payment.
Projections suggest that by the 2027/28 tax year, around 20% of UK pensioners – equating to approximately 3.1 million individuals – will be paying higher or additional rate income tax.
That would mean the number of pensioners in the West Midlands subject to higher tax rates could rise to over 150,000, according to monthly finance magazine Professional Paraplanner.
