The Department for Work and Pensions (DWP) has confirmed a September deadline for state pensioners to avoid up to £300 in tax charges. The charges apply to pensioners with an individual annual income above £35,000 who receive a Winter Fuel Payment.
Winter Fuel Payment details
Winter Fuel Payments are worth between £100 and £300 and are issued to pensioner households from November to help with heating costs. Pensioners who exceed the £35,000 income threshold will have the money clawed back in full by HM Revenue and Customs (HMRC).
HMRC will reclaim the payments automatically in the following tax year through extra monthly tax charges until the money is fully repaid. This will be done either by a tax change code for the 2027 to 2027 tax year, or by including the payment on a Self Assessment tax return.
How the tax charge works
According to HMRC, a typical Winter Fuel Payment is £200. If a pensioner receives this amount in both the 2026 to 2027 and 2027 to 2028 tax years, HMRC will deduct around £33 per month extra in tax in the 2027 to 2028 tax year.
Pensioners can avoid these extra monthly tax charges by opting out of receiving a Winter Fuel Payment altogether.
Opt-out deadlines
The DWP has set two deadlines to opt out, both in September this year. The earlier deadline is 6pm on Friday, September 18, 2026, for phone opt-outs. The later deadline is 11.50pm on Sunday, September 20, 2026, for online opt-outs.
Confirming the deadline, the DWP said: “You can choose to opt out of receiving the Winter Fuel Payment. If you do not opt out and your total income is over £35,000, you will receive the Winter Fuel Payment but HMRC will take it back. You cannot return it yourself. You can check how HMRC will take it back.
“To opt out of getting the Winter Fuel Payment you can either: use the Manage your State Pension service before 11:59pm on 20 September 2026 (if you get a State Pension), complete the opt out form before 11:59pm on 20 September 2026, or call the helpline before 6pm on 18 September 2026.
“You’ll need to provide your National Insurance number when you use the online form or call the helpline. You’ll need to sign in to use the Manage your State Pension service. If you do not already have sign in details, you’ll be able to create them.”
Impact of opting out
The DWP said opting out will not affect a person's State Pension, and there is no need to opt out every year, as no payment will be received in future unless the person chooses to opt back in. To opt back in, contact the Winter Fuel Payment Centre. To get a payment for winter 2026 to 2027, contact the service before March 31, 2027.
