The Department for Work and Pensions (DWP) has confirmed that pensioners wishing to opt out of Winter Fuel Payments must do so by September, with different deadlines depending on the method used. Those who call to opt out have until September 18, while those using the online service must complete their request by September 20.
Eligibility and Tax Clawbacks
Winter Fuel Payments are typically issued from November onwards to individuals who have reached state pension age. The scheme offers a one-off payment of between £100 and £300. Eligibility rules have changed significantly in recent years. Until the 2023/2024 winter, payments were universal for all above state pension age. For 2024/2025, the scheme became means-tested, limited to those receiving specific benefits like Pension Credit. Following backlash, the government revised the criteria again, and payments are now available to all above state pension age. However, those with an annual income above £35,000 will have the payment recouped through their tax contributions.
Income considered in the calculation includes: State Pension, company and personal pensions, earnings from employment, interest from savings, dividends from company shares, income from a trust, taxable state benefits, net profits from self-employment, and net profits from rental income. Income is assessed on an individual basis, meaning a retired couple with different income levels may face different tax outcomes.
Opting Out and Opting In
Higher-earning pensioners can use a new HMRC online calculator to determine if their income triggers a tax clawback. To avoid an increased tax bill, they can opt out of the scheme entirely. To withdraw, pensioners must provide their National Insurance number via the online form or by calling the helpline. Once opted out, no further action is needed in subsequent years unless they wish to opt back in. To rejoin, they must contact the Winter Fuel Payment Centre before March 31 of the relevant winter season.
Further information is available on the Gov.uk website.
