Winter Fuel Payments and the 2025/26 Tax Charge

From 6 April 2025, if you are a pensioner who received a Winter Fuel Payment, HMRC will recover the amount full if your income was over £35,000.

Why will this happen?

In July 2024, the government announced that payment of the Winter Fuel Payment was dependent on the individual receiving another means tested benefit.

In July 2025, the government expanded the eligibility to include pensioners with total income below or equal to £35,000, in addition to introducing the tax charge.

The introduction of this tax charge is set to affect approximately 2.2 million pensioners.

How will they recover the tax charge?

If during the 2025/26 tax year, your income breached the £35,000 threshold, HMRC will automatically collect the payment in either one of the following ways

·       In full through Self Assessment tax returns, if applicable.

·       or, monthly through your PAYE tax code

How much will be deducted from my tax code?

For 2026/27, approximately £17 per month will be deducted through your tax code.

For 2027/28, approximately £33 per month will be deducted through your tax code.

This increase is because both 2026 and 2027 winter full payment will be deducted in one.

For 2028/29, approximately £17 per month will be deducted through your tax code.

If you think this will affect you and wish you further information, please contact us.