State pensioners on Winter Fuel Payment told to avoid HMRC tax bill on Monday

Every state pensioner will be paid a £200 or £300 Winter Fuel Payment this coming winter 2025 after a wholesale change in the way the benefit is given out to retirees for 2025.

Last year, Labour had changed the Winter Fuel Payment from being universal to being given to only those who claim Pension Credit.

The change proved to be widely unpopular, with the likes of financial campaigner Martin Lewis wading in to criticise the Pension Credit system of distribution.

For this winter, it was announced that the money would be given back to everyone, no longer dependent on Pension Credit, but that those who earn £35,000 or more would have to give the money back to HMRC.

This Monday, September 15 is the beginning of what is known as the 'qualifying week' for Winter Fuel Payments. It is your circumstances between September 15 to 21, 2025 which determine whether you will in fact be made to pay the money back to HMRC.

The government's gov.uk explains: "The amount you get is based on when you were born and your circumstances between 15 and 21 September 2025. This is called the 'qualifying week'.

"Any money you get will not affect your other benefits."

But if your income is found to be over £35,000, you will be made to pay the £200 (for under 80s) or £300 (for over 80s) back to HMRC, either via a change of tax code for 2026-27 or by adding the amount to your self-assessment tax return for 2025-2026.

However, there is a way you can avoid this HMRC tax bill, and the stress of dealing with a change of tax code on your income or having to submit a tax return.

Instead, you can refuse the £200-£300 Winter Fuel Payment by informing HMRC before the end of Monday that you don't want it.

The government adds : "You can choose to opt out of getting all future Winter Fuel Payments.To opt out of getting Winter Fuel payments, you need to either: complete the opt out form on or before 15 September 2025 or call the helpline before 6pm on 15 September 2025."

If you opt out for this year, you can opt back in next year by contacting the Winter Fuel Payment Centre before April 2026: "You can opt in again by contacting the Winter Fuel Payment Centre. To get a payment for winter 2025 to 2026 you need to contact them before 31 March 2026."