Opt Out of Winter Fuel Payments or Face a Tax Clawback Headache

John Havard, consultant, warned:

There is an easy way to opt out of the tax headache caused by the WFP on the gov.uk website, but it must be done before 15th September 2025.

The Default Position and Why It’s a Problem

By default, anyone of qualifying age will automatically receive the WFP. The default is that any age qualified individual will receive the WFP. But a ‘wealthier’ individual with an income over £35,000 will be subject to a tax ‘claw back’, where the WFP they receive is required to be returned to the Government. Given this will be a complex process, and just £1 of income above the £35,000 limit is enough to trigger a clawback, those in favour of a simple life will need to opt out of WFP before the deadline of 15 September 2025.

This means even a small increase in income – such as a pension payment, savings interest, or part-time earnings could tip someone over the limit and cause them to fall into the clawback process.

The government will clawback WFP by either changing your pay-as-you earn (PAYE) tax code for the 2026/27 tax year or if you file a self-assessment tax return, you will include the payment on your 2025/26 return.

How to Opt Out

You can formally opt out of receiving WFP by completing an online opt out form on the ‘Winter Fuel Payment: Report a change or opt out’ on the gov.uk website. Alternatively, you can also contact the Winter Fuel Payment Centre by calling their helpline on 0800 731 0160 or send a letter by post but you must live in England, Wales or Northern Ireland to do so. The only information you need to have to hand is your National Insurance Number, name, date of birth and address. You will need to act before 15 September 2025.

You can opt in again by contacting the Winter Fuel Payment Centre. To receive a winter payment for the 2025 to 2026, you need contact them by 31 March 2026.

Offline Options Still Available

John added:

According to the Winter Fuel help page, you can also contact the Winter Fuel Payment Centre via the telephone or post to opt out. Hopefully the Government is providing information on these avenues of contact via offline sources such as television, radio and leaflets, as those opting out in these ways are likely doing so because they are not online.

Key Takeaway for Higher-Income Pensioners

If your income is even slightly above £35,000 and you are age-qualified for the Winter Fuel Payment, it is worth acting now to avoid an unnecessary and potentially complex tax clawback process. Opting out before 15 September 2025 could save you time, hassle, and administrative headaches later.

Would you like to know more?

If you would like to discuss any of the above, please speak to your usual Blick Rothenberg contact or Stefanie Tremain use the form below.