You only lose the fee if you are upgraded by BA (and there is other criteria too)

If you are paying for it, through cash or Avios as the latter is in this case then you're entitled to a refund and I have had this before when I was a Blue.

However, if you have earmarked the pot for next year then CW on the UD is still a very good place to be, most definitely

For refunds see this on ba.com

https://www.britishairways.com/en-gb...es-and-refundsRefunds

When you can claim a refund

You can claim a refund for seats you paid to reserve if:

• there is an aircraft change, or your flight has been cancelled and we’re unable to move you to a suitable alternative seat that you’re happy with
• you become unable to meet the Civil Aviation Authority (CAA) safety requirements to sit in an exit row seat and you contact usat least 48 hours before your flight
• you have paid for an upgrade and do not wish to pay the difference in order to reselect your seat in the alternative cabin

========================================When you cannot claim a refund

• If you cancel your flight.
• If you are upgraded by us.
• If you are not suitable to sit in the seat type you have selected (according to CAA safety regulations) e.g. an exit row seat.
• If you choose to change your flight, you will be entitled to choose an equivalent seat on your new flight. If you change to a lower priced seat, we will be unable to refund you the difference.
• If you booked a British Airways operated flight through another airline, e.g. Iberia, and you change your flight, you will not receive a refund for the reserved seats and you will need to reserve and pay for seats again on the new flight.