DWP Confirms Strict Deadline For Pensioners Over 66 To Opt Out Of Winter Fuel Payment 2025

The Department for Work and Pensions (DWP) has set a strict deadline for all state pensioners aged over 66 regarding the Winter Fuel Payment (WFP).

This payment, usually worth £200 or £300, helps older people cover heating costs during the colder months. However, pensioners with higher incomes now face new rules, deadlines, and tax adjustments.

In this article, we break down the new Winter Fuel Payment rules, who qualifies, the income threshold, and what pensioners must do before 15 September 2025 to avoid issues.

What is the Winter Fuel Payment?

The Winter Fuel Payment (WFP) is a government support payment designed to help pensioners manage energy bills during the winter.

• Amount: £200 for most pensioners
• Amount for 80+ years: £300
• Automatic payments for those who qualify
• Payments are tax-free, but new recovery rules apply for high-income pensioners

Why is There a Deadline?

From September 15, 2025, pensioners earning more than £35,000 a year must notify HMRC if they want to opt out of receiving the Winter Fuel Payment.

If they do not opt out, the payment will still be made but will later be recovered automatically through PAYE or self-assessment tax.

Changes Announced in 2025

The new Labour government introduced significant changes after a policy U-turn:

• Last year, payments were means-tested for the first time.
• Only pensioners receiving certain benefits qualified.
• Now, in 2025, all pensioners earning under £35,000 will get the WFP.
• Those earning more than £35,000 will still get it but must pay it back via tax unless they opt out.

Key Income Thresholds Explained

Income Level	Winter Fuel Payment Status
Below £11,600	Automatically qualify, no tax recovery
£11,600 – £35,000	Qualify for full payment (£200–£300)
Above £35,000	Payment will be recovered through tax unless opted out by 15 Sept 2025

Who Needs to Take Action?

• Pensioners with an income over £35,000.
• They must inform HMRC by 15 September 2025 if they wish to opt out.
• If they don’t act, the money will be recovered later through the 2026/27 tax year (PAYE or self-assessment).

How to Opt Out

According to Katherine Ford, ICAEW Technical Manager, Tax:

• Pensioners must contact HMRC before 15 September 2025.
• HMRC has an online tool to check if income crosses the £35,000 threshold.
• Opt-out requests must be completed online or by post.

What If You Don’t Opt Out?

If a pensioner with income over £35,000 receives the payment:

• HMRC will automatically recover the amount via the tax code.
• For PAYE taxpayers: adjustment in the 2026/27 tax year.
• For self-assessment taxpayers: added to 2025/26 tax return.

When and How Payments Will Be Made

• Applications by Post – From 15 September 2025
• Applications by Phone – From 15 October 2025
• Payments:
  • £200 for pensioners under 80
  • £300 for households with at least one person over 80

Who is Not Eligible?

You will not get the Winter Fuel Payment if:

• You were in hospital receiving free treatment during the entire qualifying week (and the year before).
• You were in prison during the qualifying week.

Why This Change Matters

The update ensures that:

• Lower and middle-income pensioners continue to receive vital support.
• High-income pensioners are not unfairly benefitting from taxpayer money.
• The government can recover funds efficiently while still providing support to those most in need.

The DWP Winter Fuel Payment deadline of 15 September 2025 is crucial for pensioners earning over £35,000 annually.

Those who do not opt out will still receive the payment, but HMRC will later reclaim it through the tax system. For millions of others, this update is positive, as pensioners earning less than £35,000 will continue to get £200 or £300 automatically.

This change highlights the government’s effort to balance fairness and support, ensuring that those most in need continue to benefit while avoiding misuse of taxpayer funds. Pensioners must act on time to avoid unexpected tax recovery later.

FAQs