Winter Fuel Payment restored but high-income retirees must repay it

The Department for Work and Pensions reversed its earlier decision to limit the Winter Fuel Payment to only those on Pension Credit, expanding eligibility back to most state-pension-age adults. Official figures show 10.9 million people received the payment in the 2025/26 winter, up from 1.3 million the year before. Nonetheless, about 2.2 million pensioners whose individual income exceeds £35,000 will have the entire amount reclaimed through HMRC by adjusting their tax codes, so they receive no cash.

For the upcoming 2026/27 winter, the payment will be £200 for recipients under 80 and £300 for those 80 or older, with amounts varying by household circumstances. The income threshold is applied to each person separately, meaning a partner’s earnings are irrelevant. Financial planner Ian Futcher of Quilter highlighted the dramatic policy flip and reported that 22 % of retirees have changed their financial plans in response, underscoring the payment’s importance given average energy costs of £1,744 per year. He also advised low-income pensioners to check eligibility for the more generous Pension Credit.