HM Revenue and Customs (HMRC) will send tax bills to state pensioners who receive a Winter Fuel Payment this year and exceed an annual income threshold. Winter Fuel Payments will begin rolling out to pensioners born on or before June 27, 1960 from November.
The payments are worth between £100 and £300 and are meant to help pensioners pay heating bills over the winter. But those with a total income over £35,000 will have these payments automatically reclaimed by HMRC through additional monthly tax charges.
Opt-out deadline passes
The Department for Work and Pensions (DWP) set a deadline for pensioners who exceed this earnings threshold to opt out of receiving a Winter Fuel Payment, and thereby avoid extra tax charges in the following tax year. But this deadline has now passed, meaning those who failed to opt out in time will receive a Winter Fuel Payment from November and will later have it taken back by HMRC.
HMRC will usually collect the amount you owe by changing your tax code, and you’ll then see the tax deducted from your wages, salary or pension. If you complete a Self Assessment tax return, you’ll pay it through your tax bill instead.
Monthly deduction amounts
According to HMRC, a typical Winter Fuel Payment is £200, which would result in additional tax charges of around £17 per month. So if pensioners receive a payment of 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. Of course, if you receive a £300 Winter Fuel Payment, your monthly tax charges will be higher.
HMRC said: “HMRC will automatically collect the payment for pensioners with total income over £35,000 through PAYE tax codes unless they already file a Self Assessment tax return. Following announcements by the Scottish Government and Northern Ireland Executive, this tax charge will apply UK-wide.
“For the 2026 to 2027 tax year, for a typical winter payment of £200, approximately £17 per month will be deducted from a PAYE customer. In the tax year 2027 to 2028, deductions will temporarily rise to approximately £33 per month for a typical payment of £200. This is because HMRC will be recovering payments for both the 2026 and 2027 winter payments in the tax year 2027 to 2028.
“This supports the transition to in-year recovery of payments, in line with normal PAYE practice. From the tax 2028 to 2029 onwards, deductions will return to approximately £17 per month.”
How to opt out next year
If HMRC changes your tax code to reclaim your Winter Fuel Payment, you’ll be contacted by email or post. This means the tax deducted from your wages, salary, or pension will increase.
While pensioners can no longer opt out of the Winter Fuel Payment this year, it will be possible to opt out for next year’s payment from December 21. Opting out won’t affect your State Pension, and you don’t need to opt out every year, as you won’t receive a payment in future unless you choose to opt back in.
If you do decide to opt back in, you can do so by contacting the Winter Fuel Payment Centre. To get a payment for winter 2026 to 2027, you will need to contact the service before March 31, 2027.
The DWP said: “You can no longer opt of the Winter Fuel Payment for 2026 to 2027. You’ll be able to opt out of the Winter Fuel Payment for 2027 to 2028 from 21 December 2026.
“If you do not opt out and your total income is over £35,000, you’ll receive the Winter Fuel Payment but HMRC will take it back.”
