Despite Rachel Reeves’s U-turn on Winter Fuel Payments, pensioners earning more than £35,000 will still miss out. However, financial advisers have recommended four ways that pensioners can scrape back the payments with some small lifestyle adjustments.

Under the changes announced by the Chancellor, pensioners will have to return their fuel payment via a tax return or PAYE if both occupants of a household earn more than £35,000. Even if just one occupant earns in excess of £35,000, half the money must be returned. Alice Haine, of wealth manager Bestinvest, told The Telegraph that this new threshold was “effectively another tax cliff-edge”.

She recommended some minor adjustments for pensioners close to the £35,000 threshold, which could “be the difference between receiving the payment or handing it back through tax”.

If one partner earns more than £35,000, she recommended transferring assets to the lower-earning spouse, which would avoid having to return half the payments.

While the pension cannot be transferred to someone else’s name, some income-generating assets can.

Another suggestion from Haine was placing savings in a cash ISA, because the interest earned is tax-free, meaning it does not count towards annual income for winter fuel eligibility.

In contrast, the interest on most savings is considered taxable income, so it would count towards the £35,000.

If people have large ISA savings, Haine noted they could consider drawing savings from there instead of pensions to stay under the threshold. However, before doing this, consider whether the cash benefits outweigh the Winter Fuel Payment. 

The payment is worth £200 a year to households with two pensioners under 80, and £300 if there is a person aged 80 or over.

Pensioners could also reduce their income by donating to charity, because the charity can reclaim the tax paid by the donor from HMRC.

In households where both occupants earn less than £35,000, they will keep the full amount. Around 75% of pensioners in England and Wales are expected to be entitled to Winter Fuel Payments, which equates to approximately nine million people.