Skip to content 
Pensioners across England, Wales, and Northern Ireland face a fast-approaching deadline to opt out of winter fuel payments for the 2025-26 season—or risk losing the entire benefit through a tax clawback.
Following a dramatic policy U-turn, the government has introduced a strict £35,000 income threshold for receiving the payment without penalty. If income exceeds this threshold by even £1, the entire winter fuel payment—worth up to £300—will be reclaimed through the tax system. With the opt-out deadline set for Monday, 15 September 2025, those affected have only a few weeks to act.
What’s Changed?
Winter fuel payments were originally universal for pension-age individuals. But now, only pensioners with a total taxable income of £35,000 or less will be allowed to keep the payment tax-free.
This change was implemented after public and political pressure caused the Chancellor to revise the original support policy. However, the new rules bring added complexity—and serious consequences for inaction.
If a pensioner does not opt out and their income later exceeds the £35,000 threshold, the full value of the payment will be recovered automatically via PAYE or through their Self Assessment return in the 2026-27 tax year.
Why Acting Now Matters
Tax experts have issued a clear warning: if you are even slightly over the £35,000 limit, you risk losing 100% of the winter fuel benefit.
“Just £1 over the threshold will trigger full clawback,” says John Havard, consultant at Blick Rothenberg. “Those who prefer a simple life should opt out before the deadline.”
Opting out prevents the payment from being issued in the first place—avoiding the need to report and repay it later. The process is straightforward and can be completed:
- Online via HMRC’s official portal
- By calling 0800 731 0160 (option 2)
- Or by writing to HMRC
How to Check If You Should Opt Out
To help pensioners make an informed decision, HMRC has launched an online eligibility checker. This tool assesses:
- Total pension income (state and private)
- Savings interest
- Dividends
- Rental income
- Other taxable sources
Before using the tool, pensioners should gather income data for the 2025-26 tax year (from 6 April 2025 to 5 April 2026), calculated to the nearest pound.
If your projected income exceeds £35,000, the tool will confirm that you are ineligible and give you the option to opt out immediately. Even if eligible, the tool clearly states: “HMRC will not take back your Winter Payment”, giving reassurance to those who qualify.
Fluctuating Income? There’s a Second Chance
What happens if your income changes later?
Katherine Ford of ICAEW explains that if a pensioner initially opts out but later discovers their income is £35,000 or less, they can still opt back in by 31 March 2026.
This flexibility is important for those with unpredictable earnings from investments or part-time work. To avoid missing out, pensioners and their advisors should plan a review of income by mid-March 2026.
Watch Out for Scams
Unfortunately, scammers are taking advantage of the confusion around these changes. Fraudsters are contacting pensioners, offering to “help” with winter fuel payments in exchange for personal information or fees.
In June alone, HMRC took down 4,600 fake websites linked to winter fuel payment scams.
Always use the official gov.uk website or consult a trusted accountant. Never share your personal details with third parties offering unsolicited “assistance.”
What About Scotland and Northern Ireland?
In Scotland, the rules differ slightly. Pensioners will receive the Winter Heating Payment, which will also be subject to a £35,000 income limit. However, the Scottish government has said details on opting out will be released in the autumn.
In Northern Ireland, pensioners may be eligible through the Northern Ireland Executive, and they can still opt out using the standard HMRC process.
What Pensioners Need to Do Now
If you or someone you know is of pension age and earns more than £35,000, it’s crucial to act now. Missing the deadline could result in an unwelcome tax surprise next year. But with a little planning, pensioners can avoid the tax trap and take control of their winter fuel support.