Winter Fuel Payments: What’s changing and what it means for you

Everyone over the State Pension age in England and Wales with an income of, or below, £35,000 a year will benefit from a Winter Fuel Payment this winter (2025/26). The government recently confirmed that all pensioners will receive the payment but for those with higher incomes, the full amount will be recovered later through the tax system.

If you or someone in your family is a pensioner, this update could affect how much support you actually receive and how your finances are managed over the year.

Let’s break down what’s happening, why it matters, and what you might want to think about.

What’s the Winter Fuel Payment?

The Winter Fuel Payment is a one-off, tax-free payment made each winter to help older people with energy bills.

For winter 2025/26:

• Households with someone aged between state pension age and 79 will receive £200.
• Households with someone aged 80 or over will receive £300.

The payment will be made automatically and, where more than one eligible person lives in the same home, it will be split between them.

What’s changing?

While it’s good news that all pensioners will receive the payment, those with an annual income over £35,000 will have to repay it. This will be done automatically through:

• The Pay As You Earn (PAYE) system if you receive a pension from an employer or private provider, or
• The Self-Assessment tax system if you manage your own tax returns.

The government says no action will be needed to trigger this, it will be handled behind the scenes. They also plan to introduce a way for pensioners to opt out of receiving the payment if they don’t want it.

Why this matters

If you’re a pensioner with income above the £35,000 threshold, you’ll still receive the payment but you’ll need to repay it later via tax.

That means the money may feel like a helpful boost when it arrives, but it won’t stay in your pocket. It’s worth being aware of this so it doesn’t cause confusion or affect your financial planning down the line.

The repayment will depend on your individual income, not the combined income of your household. If you’re not sure what this means for you, it may help to have a chat with a tax adviser.

What should you do now?

Right now, there’s no need to take action. The payment and repayment processes are automatic, and HMRC says no one needs to apply or register.

However, it’s a good idea to:

• Review your income and check whether you might go over the £35,000 threshold in the 2025/26 tax year.
• Plan ahead for the repayment, so it doesn’t come as a surprise.
• Talk to a trusted adviser if you’re unsure how it could affect your situation, or if you want to make sure your retirement income is working as well for you as it could be.

We’re here to help

We know that even small changes like this can feel overwhelming especially when tax and income rules keep shifting. If you have questions about your personal tax situation

For more information about how we can help call 01932 830664 or email enquiries@wardwilliams.co.uk