The Department for Work and Pensions has published figures showing that Pension Credit applications rose sharply after the Winter Fuel Payment announcement on 29 July 2024, which linked payments for winter 2024 to 2025 to receipt of Pension Credit or other qualifying income-related benefits1. The policy applied in England and Wales, with the Scottish Government introducing similar arrangements for Pension Age Winter Heating Payments1.
DWP received 321,035 Pension Credit claim applications in 2024 to 2025, the year covering the announcement, and 211,125 in 2025 to 2026, a fall of 34% or 109,910 applications1. Claims cleared fell 34% to 224,685, awards fell 24% to 138,165, and claims cleared without an award fell 46% to 86,5201. At the end of the week commencing 23 March 2026, 12,770 claims were outstanding, 13% fewer than a year earlier1.
The rules changed again for winter 2025 to 2026. In June 2025 the government announced that eligibility would be expanded from winter 2025 to include pensioners with total incomes below or equal to £35,000, alongside a new charge for those above that level2. As of winter 2025 to 2026, Winter Fuel Payments are made to all pensioners in England and Wales and recovered through the personal tax system from individuals with annual income over £35,000 who are not in receipt of Pension Credit or other qualifying benefits1.
The charge equals the full value of the winter payment received2. HMRC will collect it automatically through PAYE tax codes unless the pensioner files a Self Assessment return2. For the 2026 to 2027 tax year, a typical £200 payment means about £17 a month deducted; in 2027 to 2028 deductions temporarily rise to about £33 a month because payments for two winters are recovered together, returning to about £17 a month from 2028 to 20292. HMRC estimates around 2.2 million individuals are affected, including about 1.3 million PAYE-only individuals and 900,000 in Self Assessment2.
Which? reports that HMRC will contact around 1.3 million pensioners by letter, text or email about tax code changes, and that payments worth up to £300 were sent to pensioners in England, Wales and Northern Ireland last winter3. Scottish recipients received between £101.70 and £305.10 for winter 2025-26, rising to between £105.55 and £316.70 for winter 2026-27, with the same £35,000 income rules applying3.
"Linking the entitlement to Pension Credit was misguided, and meant far too many older people on low incomes fell through the cracks."
Why it matters for households
Pensioners whose total income exceeds £35,000 and who received a winter payment keep the money in full but repay it through the tax system, starting in the 2026-27 tax year2. Those on Pension Credit or certain other benefits in the qualifying week are not liable regardless of income; the benefits listed are income support, income-based jobseeker's allowance, Pension Credit, income-related employment and support allowance and universal credit2. Self Assessment filers report the charge on their return, with paper returns due by 31 October 20263. The Scottish equivalent, the Pension Age Winter Heating Payment, has the same eligibility criteria and is reclaimed the same way3.
What happens next
Opting out of the 2026-27 payment is possible from April 2026: the opt-out form must be completed before 11:59pm on 20 September 2026, or the helpline called before 6pm on 18 September 20263. From May 2026, the Pension Credit applications and awards publication moves from quarterly to annually1. Details of how to opt out in Scotland for winter 2026-27 are expected in the coming months3.
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