Unless opted out, pensioners will have received the winter fuel payment for 2025/26, but it is recoverable by HMRC if income exceeds £35,000. HMRC guidance on the recovery process has recently been updated.
The threshold
The winter fuel payment (the pension age winter heating payment in Scotland) has to be paid back if a pensioner’s income is more than £35,000. The payment is retained in full if income is £35,000 or less.
Where two or more people living in the same household have received a payment, HMRC looks at each person’s income separately. For example, if one partner has income of £36,000 and the other £34,000, only the first partner will repay their winter fuel payment.
The income
For the winter fuel payment received during November or December 2025, the relevant income is that for the 2025/26 tax year:
- All sources of taxable income are included before any deductions.
- The figures for any savings and dividend income are before taking account of the personal savings allowance or dividend allowance. Income from individual savings accounts (ISAs) and any other tax-exempt savings is excluded.
Your share of the income is only included when the income is from a joint source, such as a joint savings account.
The recovery
Pensioners who complete a self-assessment tax return will have to include details of the winter fuel payment on the return, and, if repayable, the repayment should automatically be included in the self-assessment tax bill. For everyone else, HMRC will normally retrieve the payment through their tax code. The payment received in November or December 2025 will be recovered by amending the tax code for the 2026/27 tax year, with a higher tax than paid for each month of the year. With a winter fuel payment of £200, a tax coding adjustment means around £17 more tax will be paid each month.
Photo by Arthur Lambillotte on Unsplash
