In June 2025, the government announced that, for winter 2025/26 onwards, winter fuel payments will be made to all pensioners in England and Wales. Pensioners in Northern Ireland are eligible for a winter fuel payment from the Northern Ireland Executive. In Scotland, pensioners may be eligible for the pension age winter heating payment. Guidance published by the relevant authorities (see below) explains who is eligible to receive a payment, how it will be calculated and when it will be paid.
Recovery through the tax system
The payments to be made in winter 2025/26 will be recovered in full by HMRC from pensioners with total income of more than £35,000. HMRC has now updated the government’s guidance to include further information on the recovery process.
Where the person’s total income is over £35,000, HMRC will recover the payment automatically. This will be done through the person’s pay as you earn (PAYE) tax code for 2026/27 unless they are in self assessment (SA), in which case HMRC will add it to their SA tax return for 2025/26. If the person completes a paper SA tax return, they will need to include the payment on their return.
Example
Joseph will receive a winter fuel payment of £200. His total income for 2025/26 is £40,000. He does not complete a SA tax return. HMRC will recover the full amount of the winter fuel payment through Joseph’s PAYE tax code for 2026/27, deducting approximately £17 per month between April 2026 and March 2027.
HMRC has provided a helpful online tool that can be used to check if a person’s total income is over the threshold of £35,000. Once all of the questions have been answered, the tool indicates if the payment will be recovered and if so, how HMRC will recover it.
Opting out of receiving the payment
Pensioners can opt out of receiving the payment. Pensioners in England, Wales and Northern Ireland can complete an online opt out form. It is also possible to opt out by calling or writing to HMRC. This must be done before 15 September 2025. The Scottish Government says that more information on opting out of the winter heating payment will be published in autumn 2025.
Further information
- Winter fuel payments to be recovered through tax system | ICAEW
- England and Wales: Winter Fuel Payment: Overview - GOV.UK
- Scotland: Pension Age Winter Heating Payment - mygov.scot
- Northern Ireland: Winter Fuel Payment Centre | nidirect
Tax policy update
HM Treasury will be attending ICAEW's Annual Conference 2025 with a session discussing tax policy and economic growth in the weeks ahead of the Budget.
The Tax Faculty
ICAEW's Tax Faculty is recognised internationally as a leading authority and source of expertise on taxation. The faculty is the voice of tax for ICAEW, responsible for all submissions to the tax authorities. Join the Faculty for expert guidance and support enabling you to provide the best advice on tax to your clients or business.
Latest on personal tax
Further resources
Latest news
TAXwire and Tax Track
Stay up to date with the latest developments by signing up to the Tax Faculty's weekly enewsletter and listening to the Tax Track podcast series.
Listen now Newsletter sign upPractical guidance
Tax Faculty resources
The Tax Faculty offers expert guidance and support enabling you to provide the best advice on tax legislation to your clients or business. We offer clear direction in taxing times. Membership is open to everyone.
ICAEW support
Training and events
Browse upcoming and on-demand ICAEW events and webinars focused on developments in tax practice and policy.
Events and webinars CPD courses and more