Winter Fuel Payment – How it’ll really work (Eng & Wales) | And are you drinking enough beer

The Winter Fuel Payment will again be a universal payment in England and Wales for state pensioners this winter, yet it’ll be clawed back via the tax system where someone earns over £35,000. How will this work in practice? What counts as £35,000 earnings, and what if there are two, three or more pensioners in a house. Martin also answers questions on saving for a pension, who should opt out of receiving winter fuel payment and how to avoid being scammed. Pint rights: we also look at how to make sure you get the pint you paid for.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

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• 1:49Martin Lewis?

  Hello, I'm Martin Lewis and this is the cunningly named The Martin Lewis Podcast. I do wonder what that's going to be about. Now, usually much of it comes from my BBC Radio 5 live show, but not this week. This week, it's a winter fuel payment and beer drinkers, yes, really, pod-only special just for you lucky, lucky podcast listeners. In the pod this week, how will the reintroduction of a universal winter fuel payment for all state pensioners work in practice?

• 2:20Martin Lewis?

  Those who earn over £35,000 will see winter fuel payment clawed back through the tax system. But what exactly counts towards the £35,000? How will winter fuel payment work when it's a two pensioner household or even a pensioner throuple? Not a phrase I thought I'd say very often. Plus, I hope to answer a host more of your winter fuel payment questions. All the practicals, not the politics. And are you getting enough beer? We're concerned. When a pint's pulled for you, how much of the amber nectar should there actually be in the glass? All that and more. Play the theme tune.

• 3:18Martin Lewis?

  Hello and welcome to our winter fuel payment special. As I'm sure it hasn't escaped your notice, the government announced earlier this week that winter fuel payments will again be universal. Every household that has a state pensioner living in it will automatically get a winter fuel payment. The basic payment is £200 if none of the state pensioners in the household are under 80 and £300 if they're over 80. However, if any individual state pensioner earns over £35,000 a year, they will have their portion of the winter fuel payment clawed back through the tax system. That's the summary of how it works in a nutshell.

• 4:03Martin Lewis?

  But actually, once you get into it, it gets more complicated. I've got questions to answer on what exactly counts as income for the £35,000 level, how the winter fuel payment is demarked to be split per person. Is there an opt-out rule? Spoiler, yes, but how it works is a little bit more detailed, and a whole host of other questions that I hope to go through with you. It's important at this point to say that these changes only affect people in England and Wales. In Northern Ireland, they have confirmed the executive will look to expand the payments in line with the new English and Welsh criteria. In Scotland, the existing equivalent form had said, again, eligibility and payment amounts would be the same as those in England and Wales, but we don't yet have confirmation

• 4:47Martin Lewis?

  this will be the case following the latest changes. So you're going to have to wait for updates on those, but for the moment, technically, this only applies to England and Wales. Now, as it's podcast-only this week, I'm joined by the one and only PPS podcast producer, Simon, who will be asking me your questions, because if I ask them myself, it sounds a bit weird. Hello, Simon, how are you doing?

• 5:08Speaker 00

  Yeah, delighted to be here, and just glad that you're not making me do an Adrian Charles impression.

• 5:11Martin Lewis?

  Well, I like to do my own Adrian Charles impression, you know, but if I did that, everyone would have to put the podcast on fast-forward in order to go through it in time. So, shall we get on?

• 5:23Speaker 00

  So, Martin, I'm assuming you're in favour of winter fuel payment changes, because Thorsten Bell, the Pension Minister, said this earlier this week.

• 5:29Speaker 05

  Age UK say the exact opposite. Charity director Carol Abrahams has said this announcement is the right thing to do. Martin Lewis has said, oh, it is a big improvement.

• 5:38Martin Lewis?

  Well, yeah, I have said it is a big improvement, and I do think it's a big improvement. Let's just go back, before we get into the practicals, and this programme is all about the practicals, the nitty-gritty of actually how it will work. Let's just go back to what I've said on the programme in recent weeks. My big problem with the change that was made to winter fuel payment was. Winter fuel payment used to be totally universal without any clawback. Then, for last winter, it was changed. The first big change is that the winter before, there was a cost of living payment that meant many pensioner households were getting £600. Then, last winter, the winter fuel payment was dropped, so it was a maximum of £300. But, it was means-tested, and it was means-tested for the first time. Now, I had two big problems with this.

• 6:21Martin Lewis?

  First of all, I felt that the level of means-testing was too low. For last winter, the lever was set at the income of £11,600 for a single pension. And that's really low when you consider a typical energy bill is about £1,800 a year. And many pensioners use more than that because they're in the house more and they need the heating up more, especially older pensioners. So to set it up a threshold of £11,600 left many pensioners who were just above that threshold, because that threshold is below those who just received the basic form new state pension, people who were just above that threshold, missing out. But more importantly for me was that I have never approved of the method of means testing. I'm not anti means testing.

• 7:05Martin Lewis?

  I'm not arguing that millionaires and billionaires should get the winter fuel payment. But my biggest problem was that for over a decade, I've been trying to communicate pension credit, which is a top up to the state pension for those on low incomes. But it is critically under claimed. It always has been critically under claimed. I've been shouting about it for years. And even after the government did all its communication to say, if you want to get winter fuel payment and you're on a low income, you need to get pension credit. There are still 700,000 eligible pensioners who should be getting pension credit, but don't claim. One suspects they will often be those with onset dementia or who find form feeling difficult or who find getting hold of information very difficult. So some of the most vulnerable pensioners in the country.

• 7:47Martin Lewis?

  So those were people the government said should get winter fuel payment, but weren't getting winter fuel payment, even though they were likely vulnerable and on very low incomes. And I had a big problem with 700,000 vulnerable pensioners missing out because of a critically flawed method of means testing. So when I heard, and between you and I, Simon, I heard this was going to happen about 25 minutes before the announcement was made. I got an embargoed call from someone in my office who'd got the call from the Treasury that I'd missed because I was out for a run. And so Katie, who's on my team, called me up and said, there's big news. And I was like, what? Because I don't normally answer the phone on a run, but she doesn't normally call me. So it's like, so it's like going, what's up?

• 8:31Martin Lewis?

  And she said, they're making the announcement on winter fuel changes at 12. And she gave me a very brief praise. She said, do you want to talk to them now? I said, I can't, I need to get home. So I then, I was halfway through the run. I'd done six K, I was meant to be doing 12 K. I was two and a half K from home. That last two and a half K is one of the fastest two and a half Ks I've ever done. I'm going home, I've got to get there, they're making the announcement, got to be there before the announcement. So that was how I learnt about what was happening. But the most important thing for me is the payment is now universal. Yes, it's clawed back the sum, but it's paid automatically. So we don't have this problem of the most vulnerable, who are always the hardest to reach, missing out. So that is the primary reason I say it's a big improvement.

• 9:13Martin Lewis?

  I will leave politicians to debate whether there should be an apology or not. Not interested, I'm just pleased that we've got a better system. I will also leave others to debate the level of the threshold at £35,000 per individual. It's higher than I was actually calling for because I didn't think that they would be putting that much more money towards it. And again, that's a sort of political level. My biggest issue with the old means testing was structural and the structure has been improved by this. Now, I know we've got a lot of questions, so why don't we get into those now?

• 9:44Speaker 00

  Well, we actually have a question from a caller called Denise, who I think we've got on the line. And she, she's interested in the universality of it.

• 9:51Martin Lewis?

  Sure, Denise, hello.

• 9:53Speaker 06

  Hello, Martin.

• 9:54Martin Lewis?

  Hello, how are you doing? So what is your question?

• 9:58Speaker 06

  Okay, my question relates to a single person household of state pension age, but under 80 years old. If your total income is over the £35,000 threshold and therefore your winter fuel payment is to be clawed back through PAYE or self-assessment, will the whole sum of £200 be clawed back or only the percentage according to your personal tax liability? If 100% is to be clawed back, then would it be simpler to opt out? And are there any pros and cons in doing so?

• 10:43Martin Lewis?

  Okay Denise, I absolutely understand. So what you're saying is, let's say you earn £40,000, you have £40,000 of taxable income, you're due to get the £200 payment. Will you, because you're a basic rate taxpayer, just lose 20% of that income? No, this is a cliff edge, right? This is a cliff edge payment. If you earn £35,000 exactly or less, you will get the £200 in your case because you're under 80. If you earn £35,000 and a penny, you lose the entire £200. It is not a graduated scheme, it is a cliff edge scheme, it's all or nothing. So in your case, I'm presuming that means you will get nothing.

• 11:29Speaker 06

  Thank you.

• 11:29Martin Lewis?

  And what I would say is, do listen on as we go through, because I want to explain and I will go through the exact definition of what is taxable income and that's just worth you knowing what counts and what doesn't count towards that. Then would it be simpler to opt out? Possibly yes, although the opt out mechanism is the one thing that we don't have much detail on yet. But in your particular case, as you're a single pensioner, because the real complexity is, is the opt out individual or is the opt out household? We don't know. It doesn't actually matter yet. If you are almost certain to have over £35,000 income in this current tax year, opting out is the simplest thing for you to do, once you're able to do so. Does that help?

• 12:13Speaker 06

  That answers the question, thank you very much.

• 12:15Martin Lewis?

  It's not what you wanted to hear, but at least it gives you an answer.

• 12:18Speaker 06

  Yes, and I don't want to complicate my own tax position and to opt out might be just simple for me to do.

• 12:27Martin Lewis?

  Yeah, I wouldn't have any, you know, I can't think of any reason why you wouldn't want to opt out. I'm going to give myself a slight caveat Denise, that the opt out details aren't published yet and when they publish it, there might be a reason, but at the moment I can't see any reason. Thanks so much for getting in touch. What we're doing next, Simon? Well, we've actually been joined on the line by Elaine. What, two callers? You're spoiling me. Right, hello Elaine.

• 12:49Speaker 07

  Hello.

• 12:50Martin Lewis?

  Hello. What's your question please?

• 12:52Speaker 07

  Right, so I'm a state pensioner, I get my state pension. I also work part-time, so I get a salary for that and in total, I'm just under the £35,000 to the winter kill limit. I also get savings interest and I've also got interest... With my ISA, so will that be included in the total amount of income? Because if it does, then it it it puts me over the threshold and I won't get it.

• 13:22Martin Lewis?

  Okay, so let's go through exactly what counts as taxable income.

• 13:26Speaker 07

  Yeah.

• 13:26Martin Lewis?

  So the first thing to say is the means test will be based on your taxable income for the current year. That's 2025-26 tax year. So to be really technical, the 6th of April 2025 to the 5th of April 2026. And it is all of your earnings that are subject to income tax.

• 13:46Speaker 07

  Right.

• 13:46Martin Lewis?

  Now, so that is any private pension income, the state pension income. People think that isn't taxable, it's always been taxable, employment, self employment income.

• 13:55Speaker 07

  Yeah.

• 13:56Martin Lewis?

  Any savings interest, so not the amount of savings you get outside of an ISA, right?

• 14:02Speaker 07

  Right.

• 14:02Martin Lewis?

  So the interest you get inside of an ISA doesn't count.

• 14:06Speaker 07

  Right.

• 14:07Martin Lewis?

  The interest you get outside of an ISA does count. Uh, now, just to be really technical, we don't yet know whether premium bond wins count or not. I'm almost certain they don't count because they're not taxable income, but I'm waiting to get that confirmed. So if it's just your savings interest from outside of an ISA.

• 14:31Speaker 07

  Yeah.

• 14:31Martin Lewis?

  Will that put you over the threshold?

• 14:33Speaker 07

  No, just under because I keep it at like the thousand pound limit.

• 14:38Martin Lewis?

  Well, no, hold on, I need, ah, it's interesting you said that. So you're talking about the personal savings allowance, yeah?

• 14:43Speaker 07

  Yeah.

• 14:43Martin Lewis?

  So while the personal savings allowance is an amount you are allowed to earn of savings interest tax free. As a basic rate taxpayer, you can earn a thousand pounds of savings interest outside an ISA tax free.

• 14:56Speaker 07

  Yeah.

• 14:57Martin Lewis?

  That interest still counts towards your tax free earnings for winter fuel payment. So let me just, let me just do a really simple example. You earn a thousand pounds of interest inside an ISA, doesn't count.

• 15:11Speaker 07

  Right.

• 15:12Martin Lewis?

  You earn 500 pounds of interest within your personal savings allowance, so you don't pay tax on it. That 500 pounds of interest does count towards the 35,000 pounds a year threshold.

• 15:23Speaker 07

  Right, I'm with you, yeah.

• 15:25Martin Lewis?

  Though, now, have you used this year's ISA allowance?

• 15:28Speaker 07

  Not yet.

• 15:29Martin Lewis?

  So then a very obvious thing that you could do is you could move that savings into a cash ISA.

• 15:37Speaker 07

  Yeah.

• 15:37Martin Lewis?

  And then the interest doesn't count and then you won't be over the threshold and you'll get the winter fuel payment.

• 15:42Speaker 07

  Right. I'll do that then.

• 15:44Martin Lewis?

  Yeah, exactly. So that's so good. So we've solved that. Just I'm just going to go on just for for other people. So you stay with me. Well, for a second. If you've got investment dividends outside an ISA, they count. If you get carers allowance, incapacity benefit and other taxable state benefits, they count. So what doesn't count? The winter fuel payment itself, investment income or savings income with inside ISAs, your tax-free lump sum from your pension, capital gains don't count. And then non-taxable benefits like attendance allowance, disability living allowance, pension credit and personal independence payments

• 16:20Martin Lewis?

  don't count towards your £35,000. So that's sort of my rough summary. If it's generally taxable, it counts. If it's generally not taxable, it doesn't count. Hopefully that makes sense.

• 16:33Speaker 07

  Yeah, absolutely. It does. Yeah.

• 16:35Martin Lewis?

  Perfect.

• 16:35Speaker 07

  Yeah.

• 16:36Martin Lewis?

  Well, thank you very much for calling, Elaine. Good luck. And yeah, definitely move it into a cash ISA and then that should keep you below the £35,000 and and you're a winner. Well done.

• 16:44Speaker 07

  Yeah, I'll do that today. Okay, thank you.

• 16:46Martin Lewis?

  Cheers. Right, what's next, Simon?

• 16:48Speaker 00

  So we've got this question from Angela. Just want to know if the £35,000 yearly earnings is gross or net earnings?

• 16:56Martin Lewis?

  It's gross earnings. It's it's your before tax earnings that counts as £35,000.

• 17:02Speaker 00

  Judy wants to know, will this be income from 2526 or the previous year?

• 17:07Martin Lewis?

  Yeah. So what will happen is it's your income in 202526 tax year that counts. And then if you've earned over £35,000, your tax code for the next tax year, the 202627 tax year will be altered.

• 17:25Martin Lewis?

  So to claw back, so it's sort of going to work a year in delay, if you like. So in next year's income, you will have the clawback for this year's winter fuel payment, if you got it. If you already do self-assessment, so you know, you do your tax returns, then you won't have it through your tax code. It will be done through the self-assessment system. But what they are saying is no one will be pushed into doing self-assessment because that's a hassle if you don't need to do it by the winter fuel payment. So if you're currently, the vast majority of people will do it through pay as you earn, an alteration in your tax code, either from your employer or most likely from your private pension provider, which is where most people who are of state pension age are getting their income from.

• 18:07Speaker 00

  Joanne wants to know, what if a pensioner gets attendance allowance? If the receipt of AA takes them over the £35,000 threshold, will the winter fuel allowance still be paid?

• 18:17Martin Lewis?

  No, attendance allowance does not count towards your £35,000. It is not a taxable payment. Attendance allowance massively underclaimed, and I would urge people to look at claiming attendance allowance. If you need help during the day or during the night with the basic functions of living, you know, washing, dressing, going to the toilet, you may be eligible for attendance allowance, but attendance allowance is not a taxable payment. Therefore, that should be not be counted towards your £35,000. And if that is the thing that is taking you over it, you should and will, I hope, as long as it all works, as they say, it will, get your full winter fuel payment.

• 18:59Speaker 00

  Now, I might need an explanation on what a unit trust is here, but Pam asks, what if you have a unit trust?

• 19:04Martin Lewis?

  So a unit trust is a form of collective investment. So instead of investing in one single share in a company, it will have a basket of shares. Maybe there'll be American small companies or UK technology companies, and they will all be put together so that you just invest in the unit trust and it moves with the combined underlying movements of the investment that's within there. So if you have a unit trust or any form of collective investment or any form of shares, it's not the capital gain that you make. So, you know, you invest £100 and then you sell it for £200, you've made a £100 gain. That doesn't count as income. What does count of income is any dividend payments that are made to you by having a dividend

• 19:49Martin Lewis?

  is when you own a share or a collection of shares and they pay income out each year from their profits as a distribution to their shareholders. That income counts as income because it is income. So any dividends you get count towards the £35,000 unless those dividends are paid within an ISA wrapper because ISAs are totally tax free and that doesn't count.

• 20:12Speaker 00

  And then one final one for this section. Path Pink wants to know, do you think it will be treated the same way as child benefit in that the lower paid recipient can get the whole benefit and the higher earner transfers their options out?

• 20:24Martin Lewis?

  No, this is absolutely demarked as an individual assessment. So if an individual earns over £35,000, they lose their portion. And if the other individual doesn't, they keep their portion, which moves us on to the next section, actually, which is how the winter fuel payment is split per person. I think you've got a caller on this, haven't you?

• 20:48Speaker 00

  Yeah, we've got Amanda in Nantwich.

• 20:49Martin Lewis?

  Hello, Amanda. What is your question?

• 20:51Speaker 08

  Hi, Martin. My question regarding the fuel winter payment is regarding mixed age couples. Is the criteria based on total household income or is it just based on the pensioner's income?

• 21:08Martin Lewis?

  This is generally an individual assessment with the rare exception of a household where they're entitled to pension credit and then it's done as a couple assessment. But the basic answer is it's an individual assessment. So are we talking about somebody of state pension age, married to, say, or partner with somebody of non-state pension age? Is that the situation you're thinking of?

• 21:29Speaker 08

  Yes, and the non-pensioner earns over £35,000.

• 21:32Martin Lewis?

  Irrelevant.

• 21:34Speaker 08

  Okay.

• 21:36Martin Lewis?

  It is if the state pensioner is married to a non-state pensioner, a partner with a non-state pensioner, the assessment is based solely on the state pensioner's income. If the state pensioner earns over thirty five thousand pounds, they don't get the winter fuel payment. If the state pensioner earns under thirty five thousand pounds, they do get the winter fuel payment, even if they are married to Bill Gates.

• 21:59Speaker 08

  Yeah, okay, that's great.

• 22:02Martin Lewis?

  That's how it works. Now, listen, I know some people have been listening out there going, this is ridiculous. This is a loophole to enable billionaires and millionaires' spouses to manipulate their finances. Well, first of all, let's remember this is two or three hundred quid. It's not exactly big money to billionaires in order to restructure their finances. But ultimately, almost every structure of how they were going to do a clawback on winter fuel payment was imperfect. I had personally been suggesting linking it to pension credit and council tax ban Z to see, because I was working on that the government would want to not pay out as much money as it has decided to pay out using this system. And we were told that the tax system couldn't work on an individual basis for this. But anyway, that has all been sorted.

• 22:47Martin Lewis?

  So this is an imperfect system. Let's be absolutely plain. But from my perspective, and I may be going slightly too small P political here, if you are given a choice between seven hundred thousand vulnerable state pensioners on low incomes not getting it because of the structure of that means test versus a few rich people married to somebody with a low income or partner with somebody with a low income and that person with a low income does get it. I think the greater evil is having the most vulnerable people not receiving it when they should get it than having a few people receive it when they shouldn't really get it. I mean, they should get it technically, but maybe shouldn't get it morally. I mean, the bigger question there is where the threshold has been set.

• 23:31Martin Lewis?

  So I just sort of think it was worth throwing it in there, and I better get myself out of that question. Ask me another question quickly, Simon, quickly, next question.

• 23:38Speaker 00

  Well, John actually has a similar question. How will this work where I am a qualifying pensioner who is eighty two years old with a younger partner who is working?

• 23:48Martin Lewis?

  Well, the working is irrelevant to an extent. What matters is, is your younger partner of state pension age? Which in this case means, were they born before the 22nd of September 1959? That's the crucial cutoff point. So if they're born on the 21st of September 1959, they are state pension age for the winter fuel payment. If they're born on the 22nd of September 1959 or after, they're not state pension age. So if your partner isn't a state pension age, then it is determined solely on your situation. If your partner is of state pension age, then the way it would work... Okay, so go with me.

• 24:30Martin Lewis?

  So because you're 82, you're a household that gets a £300 payment. So if you're with somebody who is of state pension age, it is demarked that you get £200 and your partner or spouse gets £100. If you earn over £35,000, you therefore don't get £200. If your spouse earns over £35,000, she or he doesn't get their £100. So it's sort of, there's a calculation of how, towards each individual. Each individual gets a payment. So if you're a state pensioner aged over 80 and you are the only person in your household who's a pensioner, you get all £300 and whether you keep that depends on whether you earn over £35,000.

• 25:13Martin Lewis?

  If you're with another state pensioner under 80, then in that case, it's demarked as £200 for you and £100 for the younger partner. And each is treated individually, whether you're over £35,000. If your partner was younger than you but over 80, which I'm pretty sure they're not, by the way you phrased the question, but let's just go for it for everybody else listening. So let's say you're 82, they're 81, then the payment is £300, but it's demarked £150 to you and £150 to your partner. And if you're both under 80, where you're getting £200, then obviously it's £100 each, it's demarked. So in almost all cases, the main way this works is the winter fuel payment is split amongst pensioners in the household,

• 25:58Martin Lewis?

  if you're in a two pensioner household. The only exception is if you get pension credit, which is for those on the lowest incomes, where it's deemed as a household payment. But in that case... Neither of you will be earning over £35,000 because you wouldn't be eligible for pension credit if you were earning over £35,000. So I don't need to go into those scenarios. And I should state at this point, while winter fuel payment is no longer going to be linked to pension credit, there are still 700,000 people out there eligible for pension credit who are missing out on it, and it's typically worth over £4,000 a year. So if you are a pensioner and your total income is low, so that's income from any earnings and income from any private pension, income from your state pension, which may not be the full

• 26:41Martin Lewis?

  state pension, if it's low, check whether you're entitled to pension credit because you might be missing out on both a large payment each year and it's also a gateway to many other entitlements. What's next?

• 26:53Speaker 00

  Perfect. Ramji, if a husband earns £36,000 and wife has income of £15,000, would they qualify to receive any winter fuel payments?

• 27:03Martin Lewis?

  If they're both of state pension age, then yes, because the wife's portion would qualify for winter fuel payments. If the wife is not of state pension age and the husband is, then no, because it's all based on the husband's earnings because he is the only state pensioner.

• 27:20Speaker 00

  Final question on this specific section. Anita, what if there's three pensioners living in the same house?

• 27:24Martin Lewis?

  Ah, the famous pensioner throuple question, although more likely perhaps than a pensioner throuple. I love saying pensioner throuple, I might say it one more time. Pensioner throuple. Perhaps a more likely scenario is two people who've just hit state pension age living with one of their parents. I think it's probably a more likely scenario, or, you know, people in a house share situation. Okay, let's get on to this because this is where it gets really complicated. Deep breath, everyone. The amount you get depends first on your age and secondly on your income. So, if you are not a household that claims pension credit, each individual in a three or more pensioner household will be paid

• 28:06Martin Lewis?

  at least £100. Now, that could increase to £150 or £200 based on the ages of other people in the household.

• 28:16Martin Lewis?

  So if all are aged sixty six to seventy nine, each person is paid the hundred pounds starting amount. So if there are five pensioners in a household, even though I had been saying earlier, you know, it's either two or three hundred pounds per household, in that rare event, it would be five hundred pounds per household with each one demarked a hundred pounds each and each one judged on whether they get it clawed back through their taxable income, depending on whether they earn over thirty five thousand pounds or not. If one person is aged eighty and the rest are sixty six to seventy nine, the person aged eighty is paid two hundred quid and the rest are paid one hundred pounds each. If more than one person is aged eighty, each person over eighty is paid a hundred and

• 28:59Martin Lewis?

  fifty pounds and anybody between the ages of sixty six and seventy nine is paid a hundred pounds and again, the clawback is based on individual income. If you're claiming pension credit, it does get really complicated, but you're effectively treated either if you're in a couple or an individual. So if you had a couple with an individual, the couple would get two or three hundred pounds depending on age and the individual would also get two or three hundred pounds depending on age. If you're wondering what happens to people in care homes, I'm still waiting for the exact details of how that will work in those specific circumstances. When I do know, I will put it in my updated guide on this, which you'll be able to find if you search in the right places that I can't mention.

• 29:41Martin Lewis?

  So look, I know all of that sounds complicated in the rare event that you are in a three pensioner household, but ultimately each individual or couple will get the winter fuel payment if they earn under thirty five thousand pounds and it will come to you and it will all work itself out. So while I've made the explanation sound very complicated because the exact structure is complicated, in reality, you're going to get a payment and I wouldn't worry about it too much.

• 30:09Martin Lewis?

  So let's move on now, Simon. I know we've got questions on the opt-out. I've already talked about that a little bit. What's coming in on that?

• 30:15Speaker 00

  Yeah, Barry's actually asked on this. I've read that I will get it, but those ineligible were to get it clawed back through tax. I see no point in that. Can I opt out?

• 30:24Martin Lewis?

  Yes, you can opt out. Simple as that. You can opt out, whether you earn over £35,000 or you earn under £30,000, you are allowed to choose not to get the winter fuel payment. And some people are politically in the run-up to this and have long been saying, "I didn't need winter fuel payment. It wasn't for me. I would give it away." Well, now they have put something in the system, even if you earn £25,000, it enables you to say, "I don't want it. I'm opting out. Don't give me the payment."

• 30:49Speaker 00

  And Brian's asked, "If I opt out of receiving winter fuel payment due to my combined private and state pension being over £35,000, would my wife receive the full amount as she's under £35,000 or will she only receive half?"

• 31:02Martin Lewis?

  The answer to this is, "I don't know." The opt-out is one of the things we haven't got final details on. I have asked, "Is it a household opt-out or is it an individual opt-out?" And we have not been given an answer. I'm not sure that's been fully decided yet. It would make sense to me that it was an individual opt-out because it's being assessed on an individual payment basis, but we just don't know. So that is a wait-and-see. Remember, none of this will be happening until later in the year and that information will be available at the time. So you're just going to have to wait to see what happens on that basis. What they have certainly said, though, is if you opt out and your circumstances change, you will be able to opt back in as long as you do it before the end of the tax year. So that shouldn't be a problem.

• 31:44Speaker 00

  And finally on this, Richard wants to know, "I believe I'll now qualify for the winter fuel payment, but I'm lucky enough not to need it. I can opt out but fear my money will just disappear into a bottomless pit. Are there any suggestions for how I can effectively give my allowance to families who need help with their bills?"

• 32:00Martin Lewis?

  Well, what I would suggest is you find a charity that you like that does exactly that, something like National Energy Action, which helps, well, not just pensioners, anybody who's really struggling with energy poverty might be a good one. Now, of course, if you were to get the money and donate it to charity, you could do it with Gift Aid, which means you'd be doing it from pre-tax income, what you wouldn't do, because well, the winter fuel payment isn't taxed, but assuming you have other taxable income, you would donate the same amount that you received in winter fuel payment from your taxable income, and that could have Gift Aid added on top, which means the charity would get even more at no cost to you. Go and have a read on Gift Aid on that one. I should note, though, that only really works for you if you earn under £35,000, because if you earn under £35,000, there's no clawback.

• 32:45Martin Lewis?

  If you were to donate it to charity and you earn over £35,000, remember, it will be clawed back through the tax system. So, the amount of money you've got, you won't receive in net, so this would be an extra donation, which would be a lovely thing for you to do, but you wouldn't be giving your winter fuel money, because the winter fuel money would be going back to the Treasury.

• 33:06Martin Lewis?

  We interrupt this to talk about beer. Don't ask me why I'm doing this voice, but I feel it's sort of wreathier than 1940s BBC. More questions to come on winter fuel payment, though, so do hold on, toodle pip. Now, we're going to talk about beer, and I have to tell you, I am one of the least qualified people in the country to talk about beer. My drinking has increased somewhat over the last few years. Four or five years ago, I used to have a drink every two or three years. Now, it's increased, I don't think the doctors will be that worried, now I maybe have one or two drinks a year. And when I do drink, it's only one drink, I've never really liked alcohol, and I specifically don't like volume drinks. If I do drink, when I was young, you know, it was a Cranberry and Diet Cola, or something

• 33:51Martin Lewis?

  of that ilk. Beer? The most disgusting drink in the world for me. I know it's an acquired taste. I never took the time to acquire it. I could not sit there and drink a pint or a shandy, not interested at all. I know many of you will be laughing at me, calling me a lightweight. I don't care, I don't get it. But I like to cover all types of consumer issues and beer is an issue that many people consume. So luckily, even though I am not a beer expert in my own right, funnily enough, on my team at Money Saving Expert, we have quite a few people who like beer. And I don't think he will be embarrassed if I introduce him this way. One of the people who really does like his beer is Kelvin. Welcome Kelvin to the podcast.

• 34:32Speaker 09

  Thank you, Martin. It's lovely to be described that way.

• 34:35Martin Lewis?

  Now, you have done a brilliant blog to help people when they're getting a pint, know whether they're getting what is due. I thought I'd have you on to describe it because I have absolutely no credibility to do this story myself. So what should people be looking at when they get the pint?

• 34:51Speaker 09

  Well, the law is not entirely clear when it comes to weights and measures regarding pints. But what you are entitled to by the law is a pint of liquid. But it does not fill to the brim of your glass, or the line of the glass has one. But what it doesn't stipulate is how much of that liquid can be head.

• 35:10Martin Lewis?

  So there's a line on the pint glass, and when they're filling it, the total amount should be going up to the line on the pint glass. So that's the first check, isn't it?

• 35:20Speaker 09

  Yep, that's the first set line if your glass has one. If it doesn't have one, then up to the brim of the glass.

• 35:25Martin Lewis?

  Okay, so the line will be for the glasses that are bigger than a pint.

• 35:29Speaker 09

  That's right.

• 35:30Martin Lewis?

  So when it comes to a pint, how much froth is allowed?

• 35:33Speaker 09

  So as it's not defined in law, the British Beer and Pub Association has its own guidelines for the industry to follow. And according to those, you're entitled to at least 95% liquid. And if you don't want 5% of that to be the foamy head, you can ask for a top up to get rid of it entirely and have 100% liquid.

• 35:55Martin Lewis?

  Have you tried that?

• 35:56Speaker 09

  Yes, very much. The guidelines state that pubs and bars should be happy to top you up. And you shouldn't worry about thinking you're causing a fuss because you're only asking for what you paid for. And I have found that it's always been met with Yeah, like the cheerful happiness, they're always happy to do it. I always like to drop in, I'm promised I didn't have a sip if they've turned away before I ask. And yeah, I've never had any problems doing it.

• 36:19Speaker 00

  It's strange, in my previous life, before I started making podcasts, I used to work in bars. It'd be fairly common that people would ask, you know, for it to be flat with no head, or sometimes people will actually do like quite a lot of head.

• 36:29Martin Lewis?

  So people specify. You see, I told you, I'm ignorant on this particular subject.

• 36:33Speaker 00

  And also, you've got to bear in mind, the person working behind the bar, definitely in my case, you know, I'm not on commission, but I am looking for a tip. So I will basically do anything the customer wanted.

• 36:42Martin Lewis?

  Yeah, fair enough. So if they want, you're hoping you smile and you'd be jolly about it, because it's only a little bit of a dribble out of the tap and you might just get a tip on the back of it. Makes sense. So there you go. There was a consumer information you never thought you were going to get. If you get a pint of beer, make sure that it's going at least up to the line if the pint has a line on it. And if you want to, and there's a lot of froth on the top, you can ask them to fill it up so the liquid is going up to the top and you're getting all liquid and no froth. Have we missed anything, Kelvin?

• 37:06Speaker 09

  Yes, just last one to add. If you're looking at your pint and you are unsure whether your, the foamy head is five per cent or more or less, you can use the width of a standard ballpoint pen to check. Or if you don't have a pen to hand, you can use a very specialist instrument called the tip of your little finger.

• 37:24Martin Lewis?

  Thank you very much. That's our beer correspondent, money-saving beer correspondent, Kelvin Goodson. Thanks for joining me, Kelvin. There we are. Because I really should not be talking about beer, because literally, I've never ordered a pint for myself. I have bought it for other people, but never for myself. Please, of course, be drink aware as well.

• 37:42Martin Lewis?

  Now, back to the winter fuel payment questions. Beer, begone.

• 37:49Martin Lewis?

  We've done the main subjects that have been coming in, Simon, but as always, miscellaneous. It's the miscellaneous section now. What else have other people asked?

• 37:57Speaker 00

  Jev wants to know, my aunt has deferred her state pension for two years. Is it worth it? Or should she claim it and get the winter fuel payment?

• 38:05Martin Lewis?

  Okay, so those are two very separate questions. The first thing to say is deferring your state pension is irrelevant for getting the winter fuel payment. The winter fuel payment is paid based on whether you are of state pension age, not on whether you are taking your state pension. So she will still get the winter fuel payment, even if she's deferred her state pension. I mean, as for whether you're asking me the bigger question, is it worth deferring your state pension? It tends to all work out much of a muchness if you live to a typical life expectancy. If you live to a shorter than typical life expectancy, then deferring your pension cannot pay out. And if you live a longer than typical life expectancy, it can be a boon. The real reason for doing it is your tax situation.

• 38:46Martin Lewis?

  So that if you are currently, you know, paying a higher rate of tax, your state pension is a taxable income, it will pay a higher rate of tax. And therefore, by deferring it to a point when you would be taxed at a lower rate, that can be beneficial. But that's not what we're talking about today. So that's just a quick point. Next question.

• 39:02Speaker 00

  Andrew wants to know, will it be increased as in the triple lock or linked to inflation or tax thresholds or the energy price cap?

• 39:09Martin Lewis?

  All we know is that this system will work for this year. You're asking me whether it will be increased or not. We don't even know whether this system will be in place for the 26, 27 winter. We only know it will be in place for the 25, 26 winter. There is no confirmation yet of what happens next. So certainly there's no confirmation of whether it will be increased or what will happen to the payment on that basis.

• 39:38Speaker 00

  Now, a really important question here from Kate. I've had a text to apply for the payment on behalf of my mother. Is it genuine or a scam for details? They want to take a one pound payment on the card via gov.com looking portal and application.

• 39:50Martin Lewis?

  No, no, scam, scam, scam. There are already scams out there. Nobody, well, almost nobody has to apply for the winter fuel payment. And certainly, nobody has to apply now. I'm saying almost nobody. If you would defer, the only cases where people will have to apply for this is if you've deferred and you've just hit state pension age, or if you've moved abroad and come back into the country, which is a very, very narrow case. So I'd prefer to just sort of say in the mainstream, no one has to apply for this. And absolutely, it is not done by text. It is not done by email in this way. You should not be applying in that way. Those are scams. Scammers are latching on to this already. The main message.

• 40:35Martin Lewis?

  The payment is automatic for almost everybody. You do not need to do anything. Anyone asking you to do something is a scammer, a criminal trying to steal your money or steal your data. Don't touch them, don't sniff them, don't smell them, don't go near them. Scam, scam, scam, scam, scam. What's next?

• 40:58Speaker 00

  So Dan wants to know, what is the point in saving for a pension? Surely ISA and premium bonds should get the money. That way you don't get taxed on it and you receive free money for not having a massive pension from the government.

• 41:08Martin Lewis?

  Well, I think it's all a little bit complicated. First of all, this is about the state pension. The state pension, how much you get depends on the number of national insurance years you have. National insurance is in reality a tax, even though it's demarked to a contributory pension system. In reality, it's a tax and you have to pay it. So you can't avoid contributing to the state pension if you earn money. And the state pension, I mean, I've done shows before about topping up your state pension. The state pension top up is one of the most lucrative things you can do because the amount of money you get from having a full state pension for most people, you know, each year you top up, the boon is huge. You have a break even of just three years of your state pension. In other words, what it costs you to top up a year, you get back in just three years of state pension. And most people get 20 years

• 41:53Martin Lewis?

  of state pension and it's inflation proof. As for what's the point in saving in a pension? Well, you save in a private pension. That's where you choose to put your own money away. Well, yes, ISA and premium bonds are where you put in money from your after-tax income and then after-tax, that money grows and any interest you have isn't taxed. But pensions, you save from your pre-tax income. And not only do you save, if you're an employee, your company has to contribute towards your pension. So let's try and do a simple example here. Now you have a £100 payment towards your private pension. I'm talking money purchase

• 42:37Martin Lewis?

  pensions. There are other types. I'm going with the simple type. You put £100 away. The first thing is, if you're employed... The minimum contribution your employer must make is if you put in 5% of your salary to the pension, then your employer must contribute 3%. So in other words, if you put in £100, your employer must contribute £60. So therefore, you've now got £160 of pension investment that's just cost you £100, but it hasn't actually cost you £100. Because if you're a basic rate taxpayer, you're paying it from pre-tax income. So you're putting £100 in, but you're only losing £80 from your pay packet. If you're a higher 40% rate taxpayer, you're only losing £60 from your pay packet.

• 43:18Martin Lewis?

  So therefore, as a basic rate taxpayer, you're getting £160 invested in your pension, and it's only costing you £80 from your pay packet. As a higher rate taxpayer, you're getting £160 put in your pension, and it's only costing you £60 in your pay packet. That is a huge boon. Now, some of the pension is taxable on the way out, but the idea that there's no point in saving in a pension, I fundamentally disagree with. For the vast majority of people, if you're looking to save for your retirement, the pension, a private pension, is by far the most effective and efficient way to do it. Any more?

• 43:54Speaker 00

  The honour have been the final winter fuel payment question for this week goes to Lee. He wants to know, how do the government know that you're spending it on heating, oil, gas, logs or coal, et cetera?

• 44:04Martin Lewis?

  They don't. This is a payment to give people in the situation where they're entitled to the winter fuel payment more money. And the concept behind it is quite simple. People of state pension age tend to be in the home more and often need to have more heating than other people, and the heating on more because they're more susceptible to cold weather in the winter than other people. And this is a payment to acknowledge that. That's why it's called the winter fuel payment, because you tend to have the heating on more in the winter, and it's for state pensioners because they're more susceptible to the cold. Of course, that doesn't mean there aren't many other people struggling on their energy bills at the moment, who are under state pension age. That is help available. If you're really struggling, talk to your energy company, it may well have funds. And the other big message I always say...

• 44:49Martin Lewis?

  Remember, if you are in one of the two thirds of households in England, Scotland and Wales that is on a price capped tariff, that means the standard default tariff that you're on if you've never switched or you moved to after a special deal like a fix ended, the price cap is a pants cap. It was originally set up to be a backstop for the type of people who never switch, but because of the energy crisis, that's still now two thirds of homes that are on the price cap. And while the price cap is set to drop by seven percent on the first of July, the current predictions are it's likely to go up again in October, up after that in January,

• 45:30Martin Lewis?

  and up after that in April. Those rises are not predicted to be that big, but they are predicted to be up, though of course, the further out you go, the more crystal ball gazing it is, and the more a big macroeconomic worldwide political event, you know, Trump, Ukraine, Russia, what's going on in the Middle East could change that one way or the other, we just don't know. But if those predictions are right, while you see a seven percent drop from the current very high rates in July, it will go up again after that over the next year. Contrast that to the cheapest fixed deal on the market. Now, fixes are there because they give you peace of mind, you know, the rate that you'll pay over a year, not the amount you will pay over the year, because use more, you pay more, but the rate that

• 46:13Martin Lewis?

  you will pay per day and the rate you'll pay for each unit of energy you use. The cheapest fixes on the market right now are 18% cheaper than the current price cap. So that's still over 10% cheaper than when the price cap drops in July. We would need to see huge falls after July for the price cap to be cheaper than fixing is right now, as long as you're going for the cheapest fix out there. So on energy bills generally, I would urge everyone to get yourself on a whole of market comparison site, that's one that doesn't hide tariffs that don't pay them, and find out what your cheapest fix is, and consider moving to that and away from the price cap. It's not possible for everyone. If you're on a prepayment meter, non-smart prepayment meter, you can't fix, but it's worth everyone having

• 46:58Martin Lewis?

  a look. And if you're saying, I won't do it because I don't want a smart meter, which is a reply I often get back, the three current cheapest tariffs at the moment do not require you to have a smart meter. And I think that's probably an end to energy and the winter fuel payment.

• 47:16Martin Lewis?

  That's it for this week. If you've enjoyed it, or you know someone who has questions about winter fuel payment, or beer for that matter, then do please tell them about it and suggest that they listen to it, or even better, suggest that they subscribe to the podcast. We tend to put out a new episode every Thursday. See you next week. Well, not literally, obviously, it's a podcast, you can only hear me, never mind see me, and I can't see you or hear you because it's not two-way. But you get the point, it was just a pleasantry. Don't go on about it, leave me alone already.

• 48:01Speaker 10

  Martin Lewis is the founder of MoneySavingExpert.com. But of course, other consumer and price comparison websites are available. You can get in touch with Martin's podcast production team by emailing [email protected]. The offers and rates mentioned in the podcast are correct at the time of recording. However, if you are listening on demand, it's worth double checking as details can date. Remember to subscribe on BBC Sounds and leave us a review however you listen.

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  BBC Sounds, music, radio, podcasts.

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