Less than 200 wealthy pensioners opt out of Winter Fuel Payment
Just 186 pensioners opted out of receiving the Winter Fuel Payment in 2021/22, despite one in five over-65s being classed as millionaires.
Around 11 million pensioners receive the annual one-off Winter Fuel Payment to help pay for heating. It is paid irrespective of income and is available to those born on or before 26 September 1955.
In 2020/21, 846 pensioners turned down the Winter Fuel Payment, but this number dropped to 186 for the 2021/22 tax year.
This is a 78% decrease, according to wealth manager and financial adviser, Quilter, which obtained the data from the Department for Work and Pensions.
It said that while no-one is likely to turn down free money, the process to opt out should be made easier so that the money could be redistributed to those who are struggling amid the cost-of-living crisis.
Indeed, former secretary of state for work and pensions, Iain Duncan-Smith, has previously suggested that wealthy pensioners should consider opting out of the payment.
Similarly, Alan Sugar has complained that the opt out process was too difficult after he received the payment.
Ian Browne, retirement planning expert at Quilter, said: “It is perfectly understandable that people do not go out of their way to opt out of this social security payment. Why turn down free money? However, we are facing one of the worst cost-of-living crises many will have faced in their lifetime and the government is already financially overstretched due to its pandemic response and will be looking at every possible way to save money.
“There are certainly more than 186 pensioners in the UK who are not reliant on the Winter Fuel Payment. In fact according to the Office for National Statistics, one in five over-65s in the UK is classified as a millionaire.
“It is possible that the jump in people opting out in 2020/21 was a result of having more time during the pandemic restrictions to navigate an opt out. The government could look at ways to make this process easier for people and redistribute to those in society who, even with this payment, will continue to struggle
“The recent council tax rebate policy illustrates that the government can formulate ways to give targeted help to those less well off in society. This social security payment needs to be more smartly distributed so that more funds can be freed up to support other pressing issues for low-income pensioners.”
Related: See YourMoney.com’s guide on How to get help with your energy bills for more information.