HMRC has set a cut-off date of 15th September for pensioners to opt out of winter fuel payments to avoid a tax clawback.
Complicated rules have come into play regarding winter fuel payments for 2025/26, meaning only pensioners with less than £35,000 in total income for tax purposes will qualify in the future, and those exceeding that should therefore opt out of the benefit.
If the threshold of £35,000 is exceeded by just £1, the whole amount will be taken back by HMRC.
Opt out to avoid having the payment later recovered
Pensioners in England, Wales and Northern Ireland can opt out by filling in an online form or by writing or calling HMRC by the deadline of 15th September 2025. HMRC has also developed an online tool to assess eligibility and tax status to assist in deciding whether to opt out, which is helpful for those unsure of what to do.
If you choose to use this tool, it is recommended to have the total amount of state and personal pension payments for the period 6th April 2025 to 5th April 2026.
If a pensioner’s income fluctuates and falls below the threshold during the winter period, they will still be able to receive the payment backdated, and will have until 31st March 2026 to opt back in to receive the payment.
Potential scammers
In June this year, HMRC removed a total of 4,600 websites linked to winter fuel payments. These scammers can be convincing, and are illegal as the payments are made universally within the threshold. It is important to complete everything through a trusted accountant or advisor, or directly through the government website here.
If you would like assistance or have any questions regarding the winter fuel allowance, get in touch with our personal tax team today to see how we can help.
