Winter Fuel Payment Clawback 2025/26

In June 2025, the UK government announced that, from Winter 2025, the eligibility for Winter Fuel Payment in England and Wales will be expanded so that more pensioners are eligible.

All pensioners born before 22 September 1959 will receive Winter Fuel Payment automatically. However, if your annual taxable income exceeds £35,000, HMRC will recover the full amount paid out. Exceeding the £35,000 threshold by just £1 will trigger the clawback.

Taxable income includes:

• Earnings

• Retirement pension

• Jobseeker’s Allowance

• Widow’s benefit

• Occupational pension

• Personal and annuity pension

• Taxable interest

• Rental property income

• Carers Allowance

• Statutory sick

• Employment and Support Allowance

• Incapacity Benefit

Paying back your Winter Fuel Allowance

Recovering the payment paid to households in the 2025/26 tax year will be determined by how your annual tax affairs are dealt with:

• If you file annual tax returns you must report the payment on the 2025/26 tax return

• PAYE Taxpayers: HMRC will collect the amount via an adjustment to the 2026/27 tax code

• From April 2027 recovery will take place in the same tax year as payment is made. The tax year 2027/28 is a catch-up year whereby 2 years’ worth of allowance (received in Dec 2026 and Dec 2027)

• From April 2028 collection will revert to one year (payment received in Dec 2028)

If you know your income will exceed £35,000 affected individuals in England, Wales and Northern Ireland can opt out of the Winter Fuel Allowance by completing an online form, or by writing or calling HMRC on 0800 731 0160 and selecting option 2. This must be done by the opt out deadline of 15 September 2025. It is advisable to check your 2026/27 tax code should you decide to opt out to ensure the Winter Fuel Allowance restriction has been removed.

Opting out of Winter Fuel allowance payments

HMRC has also developed an online tool to assess your eligibility to assist in deciding whether to opt out, which may be helpful for those who are unsure of what to do. It is advisable to have details of all income you are receiving to hand when contacting HMRC whether online or by telephone.

If your income falls below the £35,000 threshold during the 2025/26 tax year, you will be able to have the payment backdated and have until 31 March 2026 to opt back in. It is advisable to review your income in Mid-March 2026 to see if you are eligible to opt back in.

Although payments are made per household, the clawback is per individual. For example a couple receiving £300 this will be split £150 each. If one earns over £35,000 only their £150 is clawed back.

Potential Scammers

HMRC claim to have removed a total of 4,600 websites linked to Winter Fuel payment claims (June 2025).

Please be aware that these scammers can be very convincing and are illegal. Winter Fuel Allowance payments are made automatically by HMRC and any amount to be repaid will be taken via the tax system. Any queries should always be completed through a trusted advisor or your accountant if you have one, or directly through the government website gov.uk which is free to use.

Scotland and Northern Ireland

You won’t get Winter Fuel Payment if you live in Scotland, however you may qualify for the Pension Age Winter Heating payment. There will also be a £35,000 income limit in Scotland, however details on how to opt out will not be available until later this year.

People in Northern Ireland may be eligible for the Winter Fuel Payment from the Northern Ireland Executive.