Eligible pensioners will start receiving the Winter Fuel Payment for 2026-27 from November. However, if your taxable income is above £35,000, the payment may ultimately be recovered through the tax system.
If your taxable income is likely to exceed £35,000 in 2026-27, you may therefore decide that opting out is preferable to receiving the payment and having to pay the associated tax at a later date.
If you are considering opting out, the deadline is fast approaching.
You can opt out by calling HMRC’s helpline by 18 September, or by using the online Manage your State Pension service or completing the opt-out form by 20 September.
Why might you opt out?
The Winter Fuel Payment will be recovered through the tax system where your taxable income for 2026-27 exceeds £35,000.
This is done by including the payment in your Self Assessment tax return (or the end-of-year return if you are within Making Tax Digital for Income Tax), or by adjusting your PAYE tax code if you are not within Self Assessment or Making Tax Digital.
For some pensioners, opting out may be a simpler approach, rather than receiving the payment and then dealing with the tax implications.
Automatic PAYE adjustments
There is another change to be aware of. From April 2027, HMRC will begin collecting Winter Fuel Payments through PAYE tax codes in advance during the year in which they are paid.
This could mean that if you receive Winter Fuel Payments for both 2026-27 and 2027-28, both amounts could be paid back at the same time.
How do I opt out?
There are three ways to opt out of the Winter Fuel Payment:
- By telephone: Call HMRC on 0800 731 0160 by 6pm on 18 September 2026;
- Online: Use the Manage your State Pension service by 11.59pm on 20 September 2026; or
- By form: Complete the opt-out form by 11.59pm on 20 September 2026.
Once you have opted out, you will not receive Winter Fuel Payments in future years unless you choose to opt back in.
If you have previously opted out but now want to receive the payment for 2026-27, you must opt back in by 31 March 2027.
How M+A Partners can help
Whether opting out makes sense will depend on your individual circumstances, including your expected income for the year and how you usually pay your tax. If your income is close to the £35,000 threshold, now is a good time to review your position rather than leaving the decision until the payment is received.
If you are unsure whether opting out is appropriate, we can review your expected income and explain how the Winter Fuel Payment could affect your tax position.
For any queries on this matter, please get in touch with your usual M+A Partners’ adviser or contact me using the details below.