Higher-income pensioners face Winter Fuel Payment clawback

People in receipt of a pension with an income above £35,000 are being reminded that any Winter Fuel Payment they receive this winter will be taken back by HMRC, with some set to see two years’ worth recovered at once.

Payments of between £100 and £300 are being made to people born on or before 27 June 1960, with most arriving in November or December 2026. The amount depends on age and living arrangements.

How the £35,000 threshold works

The threshold is not an eligibility cut-off and anyone whose total individual income is over £35,000 will still be paid, but HMRC will recover the full amount through the tax system.

However, be aware that a partner’s income does not count towards the total.

The opt-out deadline for this winter passed on 20 September, so many will now receive a payment they later have to repay.

Double deductions ahead

For those taxed through PAYE, HMRC usually recovers the payment through their tax code. Where last winter’s payment is still being collected, tax codes will change in January 2027 to start recovering this year’s payment too.

HMRC estimates this will mean around £30 to £33 more tax each month for someone receiving £200 in both years.

Unless they opt out, tax codes will change again in April 2027 to begin collecting the 2027 payment in advance.

Self-assessment taxpayers must include the payment on their tax return for each year they receive it.

Online filers will usually see it added automatically as a ‘Winter Fuel Payment charge’, with the 2025 payment falling due on the 2025/26 return by 31 January 2027.

Avoiding repayment

The opt-out process for winter 2027/2028 reopens on 21 December 2026, meaning anyone confident their income will remain above £35,000 can choose to opt out rather than repay the money through the tax system at a later date.

Recipients should also report changes, such as moving house or into a care home straight away, as delays can lead to an overpayment that must be repaid.

If you would like help checking whether the charge applies to you or how it affects your tax position, please get in touch with our team.