Money blog: Pensioners who earn over £35,000 told to act to avoid ‘tax headache’ | Money News

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Pensioners who earn more than £35,000 can avoid a “tax headache” by opting out of the winter fuel payment, a leading tax advice firm says.

Most people of state pension age get the payment of between £100 and £300 towards heating bills automatically, but if your income is more than £35,000, HMRC will take it back.

To do so, HMRC will change your tax code for the 2026-27 tax year or add the amount to your 2025-26 self assessment tax return. 

To avoid this, you can opt out of the payment – but you need to do it by 15 September. 

John Havard, a consultant at Blick Rothenberg, said: “The default is that any age qualified individual will receive the winter fuel payment. 

“But a “wealthier” individual with an income over £35,000 will be subject to a tax clawback, 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.” 

How can you opt out of the payment? 

You can opt out of the payment on the gov.uk website. You must live in England, Wales or Northern Ireland to do so.

You can also contact the Winter Fuel Payment Centre via the telephone or post to opt out. 

You’ll need to provide your name, address, national insurance number and date of birth.

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