The Department for Work and Pensions (DWP) has confirmed a September 2026 deadline for state pensioners born on or before September 22, 1960, urging them to review their finances immediately or risk an unexpected tax bill from HMRC. Pensioners earning more than £35,000 annually will receive the Winter Fuel Payment only to have it recovered through the tax system, meaning the funds may be deposited and later reclaimed.
Opt-Out Options and Deadlines
Pensioners who wish to avoid this clawback must opt out by contacting the Winter Fuel Payment Centre before the September deadlines. To opt out, they need their National Insurance number. The DWP stresses that returning the money after deposit is not permitted; HMRC will automatically recover it from those earning above £35,000. The opt-out decision carries forward to future years unless the pensioner contacts the centre to opt back in. Those wanting to resume receiving payments for winter 2026-27 must notify the DWP by March 31, 2027.
Reporting Changes in Circumstances
The DWP also warns pensioners to report any change in circumstances—such as moving house, entering a care facility, or other changes affecting eligibility—promptly. Failure to provide correct information may result in having to repay overpayments.
Background: Policy U-Turn
This alert follows a controversial policy reversal. In July 2024, Chancellor Rachel Reeves restricted Winter Fuel Payments to those on Pension Credit or other means-tested benefits, calling it a “tough choice” to repair public finances. The decision sparked backlash from charities warning millions of elderly people would face choosing between heating and food. Labour MPs also noted many low-income pensioners missed out because they were eligible for Pension Credit but had not applied. Under pressure, the government reversed the policy in June 2025, reinstating payments for all state pensioners in England and Wales without requiring a qualifying benefit. However, the restored program introduced the new condition: those with incomes over £35,000 receive the payment initially, but HMRC recovers the full amount via the tax system.
Campaigner Concerns and Next Steps
Campaigners argue this arrangement risks confusion, as many elderly people may not realize the payment could increase their tax liability. With September deadlines approaching, the DWP urges affected pensioners to check their circumstances now. For more information, contact the Winter Fuel Payment Centre at 0800 731 0160 (Monday to Friday, 8am to 6pm), use Relay UK, or write to Winter Fuel Payment Centre, Mail Handling Site A, Wolverhampton, WV98 1LR.
