Pensioners are told to repay if their earnings exceed a certain limit. In the latest Winter Fuel Payment alert, HM Revenue & Customs (HMRC) made the request and will manage the Winter Fuel repayment process. The repayments won’t occur without prior notice, so it’s best to keep a close eye on the post. There are two methods by which you may have to repay your winter support payment, so discover which method would be most appropriate for your current financial circumstances.
Preparations for the upcoming cold are underway
Winter is approaching fast, and with it, the dread of having to pay higher electricity bills. Fortunately, winter support programmes, such as the Winter Fuel Payment programme, are available to provide Britons with some financial relief. The payments, worth between £100 and £300, are distributed annually and help eligible Britons with additional heating expenses.
However, HMRC’s latest Winter Fuel Payment alert has pensioners in turmoil, as some are being requested to repay their Winter Fuel Payments if their earnings exceed the limit. Discover why some may have earnings higher than anticipated, and which methods HMRC will utilise to recover the payments of high earners. For some, there may be a way to avoid it altogether.
Pensioners told to repay if earnings exceed this limit
DWP confirmed in its latest data release that more than 800,000 Britons missed out on Winter Fuel Payments in 2024. As a result, DWP’s latest plan involves contacting all those who missed out to offer a second chance to receive Winter Fuel Payments. Unfortunately, while some are receiving a second chance, certain pensioners will have to repay their winter support.
Pensioners will have to repay if their earnings exceed this limit:
- Annual taxable gross income of £35,000 or more
Couples’ annual gross incomes will be considered separately. You can use the UK Government’s online tool to calculate your total earnings. Please note that the following contribute to your taxable gross income:
- State Pension
- Employment earnings
- Company and personal pensions
- Trust income
- The company shares’ dividends
- Savings interest
- Taxable state benefits
- Self-employment net profit
- Rental income
Two methods will be used to repay Winter Fuel Payments
According to the UK Government’s official information about the Winter Fuel Payment, there are two methods by which HMRC will take back your winter support payments. Both repayment methods are processed through the tax system. In one, HMRC changes your PAYE tax code for the fiscal year, and in the other, repayments are done through Self Assessment tax returns.
Repayments by changing the PAYE tax code
- HMRC automatically recovers the payment
- The 2026/2027 fiscal year’s PAYE tax code will change
- HMRC will send a notice letter, or
- A notification through the HMRC app about the tax code change
- You pay higher monthly taxes until the full 2025 Winter Fuel Payment has been repaid
Repayments by Self Assessment tax returns
- Repayments must be made through the usual Self Assessment tax returns
- Winter Fuel Payments from the 2025/2026 fiscal year and onwards must be included on the tax return
- The payment amount will most likely automatically reflect on the online filers’ tax returns
- If the payment is not automatically added, you must add it manually
- Repayments are made in the same year in which you received the payment
The repayment process is thus more straightforward than most would think. However, some experts believe that high earners may find it more beneficial to opt out of the winter support programme than to have to repay it each time. The deadline to opt out of this year’s payments has passed; however, you will have the option to do so next year. For those still seeking financial support for the winter period, consider applying for the British Gas Energy Trust’s £2,000 Energy Support Fund for families.
Disclaimer: Our coverage of one-off payments, support payments, tax reliefs, tax refunds, tax credits, and other payments is based on the official sources listed in the article. All payment amounts and dates, as well as eligibility requirements, are subject to change by the governing institutions. Always consult the official source we provide to stay up to date and obtain information for your decision-making.
