It was previously announced that eligible individuals would automatically receive the Winter Fuel Payment (WFP) for 2025-26, but it would be recovered by HMRC when a person's income exceeded £35,000. HMRC have published updates on how WFP recovery will work in practice. We take a closer look.
This is a freeview 'At a glance' guide to Winter Fuel Payment (WFP) recovery.
Background
Pensioners living in England and Wales who are eligible for a Winter Fuel Payment (WFP) during the 2025-26 winter season will receive a letter in October or November 2025 stating how much they will get.
- The amount received will depend on when the individual was born and their circumstances between 15 and 21 September 2025.
- Most eligible people will be paid in November or December 2025.
Pensioners in Scotland may be eligible for the Pension Age Winter Heating Payment. These payments will be made from November 2025.
Individuals in Northern Ireland may receive a WFP from the Northern Ireland Executive.
The recovery provisions below apply across the whole of the UK.
WFP recovery
Where a WFP recipient has income in 2025-26 of over £35,000, HMRC will recover the full WFP paid.
- For this purpose, 'income' is based on 'total income' in Step 1 of the computation in s.23 ITA 2007.
- This is not the same as 'adjusted net income'.
- This means that there will be no deduction for Gift Aid or similar payments.
- If more than one person in the household received a payment, HMRC will look at each person's individual income separately.
In most cases, the recovery of the 2025-26 WFP will be made automatically via PAYE in 2026-27, with HMRC adjusting the recipient's tax code to collect around £17 per month (based on a typical WFP of £200).
HMRC states that:
- In 2027-28, approximately £33 per month will be deducted for a typical WFP of £200.
- This is because HMRC will be collecting WFPs from both 2026 and 2027 in 2027-28.
- The monthly deduction will then return to approximately £17 per month for the 2028-29 tax year.
Recovery of the WFP will not occur via PAYE where the recipient files a Self Assessment tax return. In this instance:
- HMRC will automatically include the 2025 WFP on the 2025-26 return and it will be added to their Self Assessment tax bill.
- Where an individual files a paper tax return, they will need to include the WFP manually.
New online tool
Individuals can check whether, and how, HMRC will recover their WFP using A new online tool.
Opting out of the WFP
Individuals with income exceeding £35,000 may wish to opt out of receiving the WFP to avoid the administration and complexity of WFP recovery through the tax system. The opt-out date for 2025-26 for England, Wales and Northern Ireland was 15 September 2025. The deadline for opting out of the Scottish Winter Heating Payment was 10 October 2025.
- It is possible to opt back in by 31 March 2026 and receive the 2025-26 WFP.
- An individual may wish to opt back in if they see a change in their expected income for 2025-26 and their income is likely to fall below the £35,000 threshold.
Individuals in England, Wales and Northern Ireland can opt out of the 2026-27 WFP from 1 April 2026.
Useful guides on this topic
What is the 2025/26 PAYE tax code?
What is the 2025-26 PAYE tax code? What do the different types of tax code prefixes and suffixes mean?
External links
HMRC:
Understanding tax and your pension
GOV:
Paying back the Winter Fuel Payment
Scottish Government: