Dear ANWG members,
We are writing to provide you with a reminder about how the changes introduced for Winter Fuel Payments, or Pension Age Winter Heating Payments in Scotland, will impact pensioners moving forward. You can share this information with your networks or via your communications channels.
If you have any questions or need support with a question from your network, please contact customerengagementforums@hmrc.gov.uk.
Recovery of 2025 Winter Fuel Payments
The change in 2025 meant that if a pensioner’s individual total income for the 2025/26 tax year was:
- £35,000 or less, they will keep their 2025 payment
- more than £35,000, HMRC will recover their 2025 payment
If the pensioner lived in a household with someone else who also received a payment, HMRC look at each person’s individual income and Winter Fuel Payment entitlement separately. For example, if Person A earns £36,000 and Person B earns £22,000, HMRC will take back the payment from Person A, but Person B will keep their payment.
Pensioners on PAYE with income above £35,000 are currently having the winter 2025/26 payments recovered during the 2026/27 tax year.
Anyone who expects their total individual income from their private pension, state pension and any other sources to be over £35,000, can opt out of future payments rather than have HMRC take them back.
Opting out of future payments
Opting out is a quick and simple process. Pensioners in England, Wales and Northern Ireland can opt out of receiving future Winter Fuel Payments via DWP’s online form, which is available on GOV.UK. A telephone option is also available.
Pensioners who live in Scotland will need to inform Social Security Scotland that they want to opt out of receiving Pension Age Winter Heating Payments. More information is available on MYGOV.SCOT.
Pensioners will be opted out until they request to be opted back in, which they can do at any time, should their circumstances change in the future.
HMRC have provided a calculator on GOV.UK to help customers work out if their total income will be over £35,000.
Pay As You Earn (PAYE) recovery
HMRC issued updated tax code notifications, which reflected recovery of the Winter Fuel Payment in early April, and will automatically collect the payment through the revised tax code during the 2026/27 tax year. Pensioners do not need to take any action or call HMRC.
For a typical payment of £200, HMRC will deduct approximately £17 per month of additional tax.
Self Assessment recovery
HMRC will collect the payment through a pensioners Self Assessment tax return for 2025/26. Guidance is available in the Tax Return Notes.
For online filers, where possible, HMRC will include the 2025/26 payment on their online Self Assessment return which is due by 31 January 2027. It will show as a Winter Fuel Payment charge, pensioners should check if their winter payment is on the online return and, if not, include it themselves.
Paper filers will need to include it on their paper return, which is due by 31 October 2026.
Recovery in future years for PAYE customers
For PAYE customers who receive a Winter Fuel Payment for 2026/27, HMRC will begin to collect future Winter Fuel Payments in advance from April 2027. For example, the winter 2027/28 payment will start to be recovered in their tax code from April 2027.
This means some pensioners may find that amounts relating to more than one year are collected in 2027/28. For example, in cases where both 2026/27 and 2027/28 payments are included, this would result in two amounts being recovered within the same tax year.
Pensioners likely to face the double recovery in 2027/28 can act now to avoid this by opting out.
More information and support
General information on Winter Fuel Payments can be found on GOV.UK at www.gov.uk/winter-fuel-payment.
General information on Pension Age Winter Heating Payments can be found on MYGOV.SCOT at www.mygov.scot/pension-age-winter-heating-payment.
Further information on HMRC’s recovery approach can be found on GOV.UK at www.gov.uk/guidance/paying-back-the-winter-fuel-payment.
Thank you,