Winter Fuel Payment opt-out deadline passes; HMRC to reclaim payments from higher earners
Automatic Winter Fuel Payments worth up to £300 will be recovered from households with taxable income of £35,000 or more after the opt-out deadline closed on Sept. 15
The deadline to opt out of this winter's Winter Fuel Payment (WFP) passed at midnight on Monday, Sept. 15, meaning the government will automatically pay up to £300 to qualifying pensioners and then recover the money from households judged ineligible because of their taxable income.
The Department for Work and Pensions will make WFPs automatically for 2025/26 and HM Revenue & Customs will then reclaim payments from any household with taxable income of £35,000 or more. About 9 million pensioners — more than three quarters of those living in England and Wales — are expected to receive a payment this winter, while an estimated 2 million individuals over state pension age in England and Wales may have the money recovered if they did not opt out before the deadline.
The Treasury reversed plans earlier this year that would have removed the universal payment for many older people, a move that provoked public criticism after an initial change last winter to restrict the benefit largely to those on means-tested Pension Credit. Under the current arrangements, the WFP will be paid automatically and then "recovered" from households whose taxable income exceeds the new £35,000 threshold.
Experts and officials urged recipients to ignore unsolicited messages and calls about claiming the WFP amid a rise in scams. There have been widespread bogus text messages purporting to be from the Department for Work and Pensions seeking personal information, officials said.
This Is Money tax expert Heather Rogers explained how HMRC will reclaim the money for those whose incomes exceed the threshold. "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," she said. "If you fill in a self-assessment tax return then you can pay back the WFP with your tax."
Rogers added that HMRC has said people will not be required to register for self-assessment solely because their Winter Fuel Payment needs to be reclaimed. Taxable income for the purposes of the recovery will be calculated on a gross basis before deducting personal allowances, meaning recipients should add up pensions and all other income on which tax is payable without deducting tax-free allowances when assessing whether they exceed the £35,000 threshold.
This Is Money pensions columnist Steve Webb noted the government has emphasised that pensioners who do not currently file a tax return will not be forced to start doing so purely because of the WFP clawback.
People who opted out before the deadline and later realise they should have accepted the payment may opt back in if their circumstances change; they must contact the Winter Fuel Payment Centre by March 31, 2026 to receive this year's entitlement. Opting out for the 2026/27 payment will reopen from April next year for those who wish to decline future payments.
The government also addressed concerns about recovering the payment from estates. It said that if the WFP is the only outstanding tax item following a recipient's death, it will not seek to collect it from the deceased person's estate. If the WFP forms part of a larger outstanding income tax liability, it will be included with other amounts owed.
HMRC has said it will notify affected taxpayers of any reclaim process and the method of recovery. Recipients are advised to watch for official correspondence, ignore unexpected texts or calls asking for personal data, and contact the Winter Fuel Payment Centre or HMRC directly if they have questions about their status or the recovery process.