Winter Fuel Payment update as HMRC confirms £300 to be clawed back from pensioners

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The qualifying week for this year's payments runs from September 21 to 27, 2026

Thousands of pensioners could see hundreds of pounds taken back through their tax bills under changes to the Winter Fuel Payment.

Those with an individual income above £35,000 will have the payment recovered by HMRC, with some facing larger monthly deductions during the 2027/28 tax year.

Under the scheme, HMRC will recover up to the full £300 Winter Fuel Payment by adjusting the tax codes of affected pensioners.

This means more tax could be deducted from their salary, wages or pension each month.

HMRC will contact those affected by email or letter to explain the change.

The £35,000 threshold applies to individual income, meaning a partner's earnings will not be included when deciding whether the payment needs to be recovered.

For PAYE customers, the amount deducted each month will depend on the tax year.

HMRC said someone receiving a standard £200 Winter Fuel Payment would typically have around £17 a month recovered through their tax code.

However, this could rise to approximately £33 a month in 2027/28 because HMRC will be collecting payments relating to both 2026 and 2027.

HMRC explained: "This is because we'll be collecting payments from 2026 and 2027."

The higher deduction is expected to be temporary, with the monthly amount for a £200 payment falling back to around £17 from 2028/29.

Pensioners who know their income will exceed £35,000 can also choose to opt out of receiving the Winter Fuel Payment, avoiding the need for HMRC to recover it later.

Pensioners who wish to decline the payment before it is issued are running out of time.

The telephone opt-out deadline falls at 6pm on Friday September 18, while those choosing to opt out online must do so by 11:50pm on Sunday September 20.

Details on how to opt out have been available on gov.uk and mygov.scot since April 1, 2026. Opting out can also be done by post.

The DWP has made clear what happens if pensioners above the income threshold do not act. The department stated: "You can choose to opt out of receiving the Winter Fuel Payment.

"If you do not opt out and your total income is over £35,000, you will receive the Winter Fuel Payment but HM Revenue and Customs (HMRC) will take it back. You cannot return it yourself."

Eligibility for the Winter Fuel Payment extends to pensioners born on or before June 27, 1960. Payment amounts range from £100 to £300, depending on age and personal circumstances.

The qualifying week for this year's payments runs from September 21 to 27, 2026. The DWP has encouraged anyone who believes they qualify but does not receive a letter to check whether they need to make a claim.

From October, eligible retirees across England, Wales and Northern Ireland will receive written confirmation of their entitlement.

Those who qualify can expect the money to be paid directly into their bank accounts during November and December, with most recipients not needing to take any action.

For those who file a Self Assessment tax return, HMRC will recover the payment through their tax bill rather than through tax code changes.