Fuel payments for winter 2024/25 in England and Wales were restricted to pensioners in receipt of certain benefits, including pension credit.  

On 9 June 2025, the government announced that fuel payments for winter 2025/26 will be made to all pensioners. Where the person’s income exceeds £35,000, HMRC will recover the full amount of the winter fuel payment through pay as you earn or, if necessary, through self assessment (SA). The government says that it will develop a simple system for pensioners to opt out of receiving winter fuel payments if they choose to do so. 

The government says that winter fuel payments will be recovered “automatically” from those with income over the threshold, and that “no one will need to register with HMRC” for this purpose or “take any further action”. The government estimates that 2m pensioners will have their winter fuel payments recovered through the tax system.  

Katherine Ford, Technical Manager – Personal Taxes, ICAEW, said: “Although this is welcome news for many pensioners, it will put an additional burden on an already over-stretched HMRC. We look forward to receiving more information about how it will work in practice, and how HMRC plans to resource it, including dealing with increased contact from pensioners. A digital-only solution may not be appropriate for the digitally-excluded.” 

For 2025/26, winter fuel payments in England and Wales will be £200 for households including someone between state pension age and 79, and £300 for households including someone aged 80 or over. The payment will be shared by the pensioners in the household where the household is not in receipt of an income-related benefit. The payment will be recovered from individuals based on their own taxable income.  

Payments similar to the winter fuel payment are made in Scotland and in Northern Ireland. The government says that the Scottish Government and the Northern Ireland Executive will receive an uplift in their funding as a result of this change in England and Wales.