Pensioners can avoid tax bill by opting out of Winter Fuel Payment

The Winter Fuel Payment is worth between £200 and £300 depending on age and circumstances, and is usually paid automatically to eligible households

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From April 1, pensioners in England and Wales will have the option to opt out of the Winter Fuel Payment for 2026/27, a move that could potentially help some avoid a later tax bill or adjustment.

Following rules implemented last year, the annual heating payment is now aimed at those with incomes at or below £35,000.

However, it will be paid automatically, even if someone’s income surpasses that level, unless they choose to opt-out before the September deadline.

For pensioners with higher incomes, any payment received will be reclaimed by HM Revenue and Customs (HMRC), typically through adjustments to their tax code in the subsequent financial year. Opting out means the payment is not issued in the first place, eliminating the need for it to be repaid later.

The Winter Fuel Payment ranges between £200 and £300 depending on age and circumstances, and is usually paid automatically to eligible households.

Although the amount is based on household eligibility, it is paid to individuals. This means one person in a couple can opt out while the other continues to receive their share, depending on their income, reports the Daily Record.

Last year, some pensioners were unaware they could opt out before the qualifying week in September, resulting in them receiving the payment and later facing its recovery.

The qualifying week for the 2026/27 payment is typically the third week in September, so anyone wishing to opt out will need to do so before then. The Department for Work and Pensions (DWP) will confirm the exact dates later this year.

Pensioners who opt out but later find their income falls below £35,000 can still make a claim for the payment up to March 31, 2027. Meanwhile, those who did not receive the Winter Fuel Payment for 2025/26 can still submit a claim before March 31 this year.