Winter Fuel Payments will be paid to pensioners unless they choose to opt out of receiving the money (Image: Getty)
Older people in the UK can now check if a Department for Work and Pensions (DWP) payment worth up to £300 will be reclaimed from them. Higher income pensioners can now use a new online HM Revenue and Customs (HMRC) tool to work out whether Winter Fuel Payments or Pension Age Winter Heating Payments may later be recovered through tax.
The reminder was published in a recent DWP Touchbase newsletter. Modifications to both annual payments were brought in last winter.
As reported by the Daily Record, under the revised system, Winter Fuel Payments and Pension Age Winter Heating Payments will be automatically issued to pensioners unless they actively choose to opt out of receiving the funds.
However, HMRC will recoup the payment from pensioners whose total individual income surpasses £35,000. According to official guidance, repayment will occur either through an automatic tax code adjustment in 2026 or via Self Assessment tax returns.
Higher income pensioners can now use a new online HM Revenue and Customs (HMRC) tool (Image: Getty)
The £35,000 threshold applies to a person’s total taxable income, including:
- State Pension
- Private and workplace pensions
- Earnings from employment
- Savings interest
- Dividends
- Rental income
- Taxable state benefits
HMRC has introduced an online calculator to assist pensioners in estimating their overall income and establishing whether they are likely to have the payment recovered through taxation. The guidance clarifies that income is evaluated on an individual basis rather than per household.
This means one member of a couple may be required to repay the Winter Fuel Payment or Pension Age Winter Heating Payment while the other retains it.
HMRC provided the example of a pensioner earning £36,000 whose partner earns £22,000. In this scenario, the higher earner would repay the payment while the lower earner would keep it.
Pensioners across Scotland, England, Wales and Northern Ireland who anticipate their income will surpass £35,000 can also opt to decline receiving future payments entirely.
The UK Government indicated this could assist some individuals in avoiding the need to repay the funds later via the tax system.
An online opt-out form for those eligible for the Winter Fuel Payment is accessible through GOV.UK, while a telephone service is also provided for people unable to access the online procedure.
Pensioners in Scotland can opt out by contacting Social Security Scotland by telephone on 0800 182 2222 between 8am and 5pm, Monday to Friday. Complete details are available on MYGOV.SCOT.
HMRC also confirmed pensioners are unable to repay the payment early as a single lump sum. Instead, the funds will typically be recovered incrementally through PAYE tax code adjustments.
The guidance notes a standard £200 Winter Fuel Payment could raise someone’s tax liability by approximately £17 per month throughout the recovery period.
HMRC stated pensioners ought to have received correspondence by letter or email from April this year if their tax code is being amended to recover the payment. For those completing Self Assessment tax returns, the Winter Fuel Payment or Pension Age Winter Heating Payment repayment will instead be incorporated into their annual tax bill.
The UK Government stated that pensioners who choose to opt out can elect to rejoin the scheme at a later stage should their circumstances alter.
Both payments are intended to assist older people with heating expenses throughout the colder months and are ordinarily paid automatically to eligible pensioners.
Comprehensive details regarding use of the online tool are available on GOV.UK.