Pensioners had until September 15 to opt out of this year’s Winter Fuel Payment, with some nine million retirees expected to benefit. However, the estimated two million people in England and Wales who are over the state pension age and have a taxable income of more than £35,000 will not be allowed to keep the money.
For 2025/26, the payments of up to £300 are automatic for everyone, but then “recovered” from those who aren’t eligible due to a Government policy change earlier this year. This prompted many pensioners to opt out, though the deadline for this has now passed. The option to opt out of the 2026/27 payment will be made available next April. Those who opted out by mistake can opt in again if their circumstances change by contacting the Winter Fuel Payment Centre by March 31, 2026.
This is Money’s tax expert Heather Rogers explained how HMRC will claw back the money from those earing above the threshold.
She said: “It will either send a simple calculation and deduct it from your tax code, or if you don’t have any income subject to PAYE, it will send a bill.
“If you fill in a self-assessment tax return then you can pay back the WFP with your tax. HMRC has said no-one will have to register for self-assessment if their WFP has to be clawed back.”
This Is Money’s pensions columnist, Steve Webb, added: “The Government has been at pains to stress that pensioners who do not currently file a tax return will not have to start doing so.
“One issue that has concerned people is whether HMRC will be chasing the families of people who have died after receiving their WFP but before it can be clawed back.
“The Government has said that if this is the only outstanding item of tax due then they will not seek to collect it, but if the WFP is simply part of the total outstanding income tax due then it will be added in.”
