Recent headlines have highlighted the potential for a “clawback” of Winter Fuel Payments (WFP). This winter marks the first year of a new income based system, and higher income pensioners may find they are required to repay the full amount through the tax system.
What has changed?
From winter 2025/26, almost all pensioners again receive the standard Winter Fuel Payment following a government U turn on earlier means testing proposals. However, HMRC has now introduced a strict income threshold:
- If your total taxable income is £35,000 or less – you keep the Winter Fuel Payment.
- If your income exceeds £35,000 – HMRC will reclaim the full amount.
This threshold is applied per individual, not per household. HMRC confirms that anyone with income over £35,000 must repay the full payment. Even £1 over the limit results in losing the entire benefit.
What counts as ‘income’?
HMRC requires individuals to include all taxable income, such as:
- State Pension
- Private or workplace pensions
- Employment income
- Taxable savings interest
- Dividends
- Rental profits
Interest within an ISA is excluded, as it is not taxable.
How HMRC recovers the payment
Repayment is made automatically:
- If you are not in Self Assessment – HMRC will adjust your 2026/27 tax code to recover the money across the year.
- If you are in Self Assessment – the clawback will be added to your 2025/26 tax return calculation.
What should you do?
If you are unsure whether your income exceeds the £35,000 threshold, HMRC has released an online calculator to help you check: https://www.gov.uk/guidance/paying-back-the-winter-fuel-payment
If repayment is due, HMRC will automatically handle recovery, there is nothing you need to do unless your circumstances change or your tax code looks incorrect.
