Paul Lewis: August money news
The latest money news from our expert including the latest on winter fuel payments and a possible pension tax refund.
Image credit: GettyImages
The latest money news from our expert including the latest on winter fuel payments and a possible pension tax refund.
Everyone living in England, Wales and Northern Ireland born on 21 September 1959 or earlier will get the Winter Fuel Payment. It will be £200 for those aged 66-79 and £300 for over-80s.
It is paid per household and will normally be split half each between couples who qualify. People in care homes who do not receive a means-tested benefit will get half those amounts. However, anyone with a taxable income in 2025/26 over £35,000 will have their payment clawed back from April, normally through PAYE.
No one will have to register for self-assessment to pay it back.
In Scotland it will be called Pension Age Winter Heating Payment and will be £203.40 or £305.10. The same £35,000 income limit applies. Full details of the clawback are awaited.
Saga Money has the latest on who will get the winter fuel payment, how to claim it, and how to increase the chances that you’ll be eligible.
At least 10,000 people who took money out of their pension fund claimed back £44 million tax in the first three months of 2025 after being overcharged by HMRC.
In 2023/24 a million people aged 55-plus took money out of their fund. Three quarters of it is taxable and when taken out, HMRC assumes the rest will be a monthly income which pushes them into higher tax brackets, then deducts that from the amount.
People can claim the tax back at once, or wait for HMRC to correct its arithmetic and change their tax code, which takes longer. More at gov.uk, search ‘pension tax refund’.
Find out more about the £1 pension trick that could save thousands in tax.
If you live in England or Wales, are a householder who pays the energy bills, and get Universal Credit, Pension Credit or any other means-tested benefit, you will be entitled to £150 off one winter electricity bill this year, applied automatically to your bill. The Warm Home Discount will no longer take into account high energy costs criteria.
In Scotland, the rules may be slightly different. Ask your supplier later in the year. The scheme does not apply in Northern Ireland.
Pensions Minister Torsten Bell has ruled out changing the law to help pensioners whose company pension is reduced when they claim their state pension.
Many schemes have scrapped this archaic rule, but others have not and some people find hundreds of pounds taken from a company pension when they reach state pension age. Agreeing that deductions are ‘a big shock’,
Bell told Parliament: ‘We cannot retrospectively change the benefits schemes offered to their members.’
The experts at Saga Money have more information on how pensions are taxed, with tips on how to lower your bill.
We partner with Co-op Legal Services to offer advice and services for you and your family.
The ultimate guide to Saga Puzzles, full of technical tips, tricks and hints.
With the start of the new financial year on 6 April, our money expert explains the changes to your pension, benefits and taxes.
