HMRC outlines the process by which some pensioners will have their Winter Fuel Payment returned

Following a government U-turn, millions more pensioners will receive Winter Fuel Payments this year; however, those who earn more than £35,000 will not be able to keep the money

Additional information regarding the recovery of Winter Fuel Payments from the wealthiest pensioners this year has been released by HMRC.

The vast majority of pensioners were granted eligibility for the Winter Fuel Payment in June, following the government's contentious means-testing of the benefit in 2024, which drastically reduced the number of recipients.

Following the U-turn, approximately nine million pensioners, or more than three-quarters of the total, will be eligible for the payment this winter.

Eligible pensioners, however, will only receive the payment if their annual taxable income is £35,000 or less.

It may be more crucial than ever to use tax-free savings options like a cash ISA because this includes interest on savings as well as income from a private pension.

In order to determine whether their income surpasses the threshold, HMRC has recently introduced a new calculator.

Users must choose the types of taxable income they receive and enter their date of birth and country of residence.

The next step is for them to choose whether or not to file a self-assessment tax return and enter their income for each type.

The tool then indicates whether or not HMRC will recoup the Winter Fuel Payment and clarifies whether this will be done through their tax code or self-assessment tax return.

In an independent post, we examine ways to increase your chances of receiving the Winter Fuel Payment.

How will HMRC recover Winter Fuel Payments from pensioners who are more affluent?

Most people who fulfill the eligibility requirements will receive the Winter Fuel Payment automatically.

HMRC will, however, reclaim the payment if their income exceeds £35,000.

If you haven't already filed a self-assessment tax return, the tax code will take care of this automatically.

Tax code-based collection.

Your tax code would be modified by HMRC for the 2026 - 2027 fiscal year in this scenario.

HMRC would subtract about 17 per month for a normal Winter Fuel Payment of 200.

This will increase to about 33 per month for a 200 Winter Fuel Payment in the 2027 - 2028 tax year.

This is due to the fact that HMRC will be collecting payments in 2026 and 2027.

According to HMRC, it will then drop to about 17 per month for the 2028 - 2029 tax year.

Gathering through self-evaluation.

If you submit your self-assessment tax return online each year, HMRC will automatically include the Winter Fuel Payment as part of your income on your 2025 - 2026 tax return. The payment must be included in the 2025 - 2026 tax return for those who file on paper.

Could I choose not to receive the Winter Fuel Payment?

If you would prefer not to receive the allowance, you can choose not to receive any more Winter Fuel Payments.

You must get in touch with the Winter Fuel Payment Center by September 15, 2025, in order to accomplish this.

You can opt back in by getting in touch with them again if your circumstances change or you decide to change your mind. In order to receive payment for the winter of 2025 - 2026, you must get in touch with the Winter Fuel Payment Center by March 31, 2026.

If you live in Scotland, you may be eligible for the Pension Age Winter Heating payment, but you cannot receive the Winter Fuel Payment.