Winter fuel allowance for pensioners re-instated 🤗

RockPools

dosh37 said:

If someone is close to the threshold, then they lose the payment completely if their income is just £1 over the limit. I assume the threshold includes all gross income including savings interest? If so, then it may make sense to take out some savings to ensure the interest does not push the total income above the £35K limit.

Because the threshold is £35k, falling over the cliff edge by a few quid isn't the devastating issue it was when it was based on Pension Credits eligibility, when £200/£300 makes a much bigger difference.  There will always be a cliff edge and somebody will lose out, but this is a very generous £35k we're talking about here.

leosayer

I'd like to know the marginal tax rate % for someone earning £35,001!

Cobbler_tone

There a lot of people worrying who must have taxable income of around £35,000. Ultimately, it is a bit like worrying about whether you qualify for the next Nationwide bonus or not. Is it really going to make a tangible difference to people at that level? OK, it may impact a few who are stretched for whatever reason. They had to set the limit somewhere. A gross taxable income of £35,000 seems pretty fair and generous. You could have picked £25k, or £30k, I am sure it wasn't a number picked from the air.

I appreciate some just like getting in amongst the weeds of any benefits/payments but the vast, vast majority of people know that they are going to get it, or they need to opt out, or they are going to receive it and pay increased tax through their private pension. It will no doubt confuse a large amount of pensioners too!
 
My parents must run their heating 300+ days a year (I cringe at their energy bills and always wear a t-shirt in their house), so it will cover a few weeks of that in the middle of winter.
It is those who may not be able to afford to turn their heating on until December, or a few hours a day that I'm happy for. I never lose sight of how lucky so many of us are.  

squirrelpie

RockPools said:

There will always be a cliff edge and somebody will lose out, but this is a very generous £35k we're talking about here.

There's no requirement for a cliff edge. The payment could be tapered off between a lower and upper limit for example.

Silvertabby

squirrelpie said:

RockPools said:

There will always be a cliff edge and somebody will lose out, but this is a very generous £35k we're talking about here.

There's no requirement for a cliff edge. The payment could be tapered off between a lower and upper limit for example.

But that would be complicated, and complicated = expensive. Especially for such a low amount.   And people would still whinge.  You've only got to look at the WASPIs ( tin hat at the ready!) who mistakenly believe that the State pension age for 1950s women went from 60 to 65/66 overnight, whereas in reality it was subject to a tapered increase between 2010 and 2018.  

LHW99

I wonder if in the end this will cost more than leaving things as they were.

There are already more people claiming pension credit (good). Now peopple with an income up to £35k will be getting the payments back, plus I wouldn't be surprised if at least some of those just over the £35k limit and between SPA and 75 put a bit of money into a SIPP to reduce their overall income. So possibly anyone with an income up to around £38k could get the new payment, at least for a few years, ie households up to £76k.

Moonwolf

LHW99 said:

I wonder if in the end this will cost more than leaving things as they were.

There are already more people claiming pension credit (good). Now peopple with an income up to £35k will be getting the payments back, plus I wouldn't be surprised if at least some of those just over the £35k limit and between SPA and 75 put a bit of money into a SIPP to reduce their overall income. So possibly anyone with an income up to around £38k could get the new payment, at least for a few years, ie households up to £76k.

I’m currently 59 and my spouse is a pensioner but with an income well under £35k. My UFPLS style drawdown is below that with the tax free portion.

What happens when I reach 67 is in question as I don’t expect anything to change with inflation, so in real terms I probably wouldn’t be in a position to make the required adjustments to keep it.  However, depending on inflation, a little tweaking of when and how I take my tax free lump sum, it might be possible.

I don’t need it as £1,500 a month more than covers all our essentials. The rest is luxuries, hobbies and travel.

dosh37

Silvertabby said:

squirrelpie said:

RockPools said:

There will always be a cliff edge and somebody will lose out, but this is a very generous £35k we're talking about here.

There's no requirement for a cliff edge. The payment could be tapered off between a lower and upper limit for example.

But that would be complicated, and complicated = expensive. Especially for such a low amount.   And people would still whinge.  You've only got to look at the WASPIs ( tin hat at the ready!) who mistakenly believe that the State pension age for 1950s women went from 60 to 65/66 overnight, whereas in reality it was subject to a tapered increase between 2010 and 2018.  

How can tapering be 'complicated' and 'expensive' when HMRC uses computers?

Many of the other existing tax rules such as savings tax are even more complex.

NoMore

Moonwolf said:

LHW99 said:

I wonder if in the end this will cost more than leaving things as they were.

There are already more people claiming pension credit (good). Now peopple with an income up to £35k will be getting the payments back, plus I wouldn't be surprised if at least some of those just over the £35k limit and between SPA and 75 put a bit of money into a SIPP to reduce their overall income. So possibly anyone with an income up to around £38k could get the new payment, at least for a few years, ie households up to £76k.

I’m currently 59 and my spouse is a pensioner but with an income well under £35k. My UFPLS style drawdown is below that with the tax free portion.

What happens when I reach 67 is in question as I don’t expect anything to change with inflation, so in real terms I probably wouldn’t be in a position to make the required adjustments to keep it.  However, depending on inflation, a little tweaking of when and how I take my tax free lump sum, it might be possible.

I don’t need it as £1,500 a month more than covers all our essentials. The rest is luxuries, hobbies and travel.

If you don’t need it, then maybe you could be a good citizen and not worry about it when you come to drawing your pensions and trying to optimise around it. 

Silvertabby

dosh37 said:

Silvertabby said:

squirrelpie said:

RockPools said:

There will always be a cliff edge and somebody will lose out, but this is a very generous £35k we're talking about here.

There's no requirement for a cliff edge. The payment could be tapered off between a lower and upper limit for example.

But that would be complicated, and complicated = expensive. Especially for such a low amount.   And people would still whinge.  You've only got to look at the WASPIs ( tin hat at the ready!) who mistakenly believe that the State pension age for 1950s women went from 60 to 65/66 overnight, whereas in reality it was subject to a tapered increase between 2010 and 2018.  

How can tapering be 'complicated' and 'expensive' when HMRC uses computers?

Many of the other existing tax rules such as savings tax are even more complex.

OK then, 'expensive' in relation to the possible gains.