Pensioners who earn more than £35,000 urged to act now to avoid tax nightmare | Personal Finance | Finance

Pensioners above a certain earning threshold have been issued a tax “clawback” warning over a looming Winter Fuel Payment (WFP) deadline that could bring “administrative headaches” if ignored. Most people of qualifying age who are eligible automatically receive the WFP, a state benefit paid out by the Government which provides older people with between £100 and £300 to help with heating costs for winter 2025 to 2026.

Pensioners who have an yearly taxable income of £35,000 or more aren’t eligible but are still given the cash, with the HMRC recovering it later through the tax system. Those looking to opt out can do so through a simple process online, but the deadline for doing so is September 15th.

John Havard, a consultant at tax advice firm Blick Rothenberg, cautioned pensioners that even the smallest amount over the threshold can trigger a clawback.

In an article on the company’s website he said given returning the money “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”.

Small increases in income that could push you over the £35,000 mark include things like a pension payment, savings interest, or part-time earnings, he explained.

“You can formally opt out of receiving WFP on the Opt out of Winter Fuel Payment page on the gov.uk website,” Mr Havard said. “But you must live in England, Wales or Northern Ireland to do so.

The only information required is your your name, address, date of birth, and National Insurance number.

Mr Havard says for pensioners whose 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”.

Doing so before the September cut off “could save you time, hassle, and administrative headaches later”, he said.

You can find out more about opting out here.

Eligible pensioners receive letters in October or November informing them how much they receive, the Government website says.

Most of them will be paid in either November or December, 2025.