Pensioners with an individual annual income above £35,000 could have their Winter Fuel Payment reclaimed by HMRC through the tax system, according to Department for Work and Pensions (DWP) guidance.
Eligible pensioners in England, Wales and Northern Ireland can receive between £100 and £300 for winter 2026/27, with most payments expected to be made automatically in November or December. However, the DWP has reminded households that those with an individual annual income above £35,000 will have the payment clawed back through taxation.
Income threshold applies to individuals, not households
According to GOV.UK guidance, the threshold is based on an individual's total income rather than their household income. This means one half of a couple could be required to repay their payment while their partner retains theirs.
Gordon Wallis, energy expert at Your NRG, said: "The Winter Fuel Payment can provide valuable support for pensioners facing higher heating bills, but it's important that people understand the income rules before relying on this money."
"Some households may see the payment arrive in their bank account and assume they can put it straight towards their winter energy costs. However, if their individual income is above £35,000, they could end up having to repay the full amount through the tax system."
How HMRC reclaims the payment
HMRC will typically reclaim the money by adjusting the individual's tax code, meaning more tax will be taken from their wages, salary or pension. Those who submit a Self Assessment tax return will instead repay the sum through their tax bill.
Wallis also advised pensioners on making the most of their heating payments. "With energy costs placing pressure on household budgets, it's worth looking at how much heat your home is losing before simply turning the thermostat up," he said.
"Small gaps around windows and doors can allow warm air to escape, meaning your heating system has to work harder to keep rooms comfortable. Fitting draught-proofing strips, using draught excluders and closing curtains as soon as it gets dark are relatively simple steps that can help retain warmth."
Practical steps to reduce heat loss
The Energy Saving Trust advises draught-proofing windows, doors and other unwanted gaps to minimise heat loss and improve home energy efficiency. Wallis added: "You don't necessarily need to spend a lot of money on major home improvements to make a difference."
"Checking for draughts, making sure radiators aren't blocked by furniture and using heating controls effectively can all help households make better use of the energy they're paying for. However, it's important not to block essential ventilation, as this can contribute to condensation and damp."
For pensioners concerned about having their Winter Fuel Payment clawed back, HMRC has published an online guide detailing how to check whether their income exceeds the threshold and how any repayments will be collected. Wallis concluded: "The most important thing is to understand exactly what support you're entitled to and plan your winter energy spending accordingly."
