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HMRC will automatically change the tax codes of pensioners earning more than £35,000 a year to recover .

It has been confirmed that thousands more people over state pension age will receive the cash help this winter after a U-turn was announced by the Government.

Winter Fuel Payments will be paid to all pensioners, but if you earn more than £35,000 a year, then you will have to pay it back. This will be done either by PAYE - which will involve adjusting your tax code - or through self-assessment.

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has said no one will need to register for self-assessment unless they already need to do so for other reasons. You will also be able to opt out of receiving the payment, with details of how to do this yet to be confirmed.

HMRC confirmed: "Winter Fuel Payments will be paid automatically without a claim, and any charges will be collected via PAYE, or via self-assessment for those with other income to declare."

Winter Fuel Payments will still be issued per household, but the income eligibility is based per person. For example, if you have two people living together and one earns £30,000 a year and the other earns £40,000, one person would keep their share of the Winter Fuel Payment but the other would pay it back.

Winter Fuel Payments are worth £200 for eligible households, or £300 for eligible households with someone aged over 80. Your eligibility will be based on your age by the end of the qualifying week.

The qualifying week changes every year, but for winter 2025/26, the qualifying week will be September 15 to September 21, 2025. Under current rules that were introduced last year, Winter Fuel Payments are only available to pensioners who are claiming means-tested benefits, such as Pension Credit.

In winter 2023/24, they were available to everyone over state pension age. The update will cost around £1.25billion in England and Wales and will save around £450million.

In , the Winter Fuel Payment has been replaced with a new Pension Age Winter Heating Payment.

said: “Targeting Winter Fuel Payments was a tough decision, but the right decision because of the inheritance we had been left by the previous government.

“It is also right that we continue to means-test this payment so that it is targeted and fair, rather than restoring eligibility to everyone including the wealthiest.

“But we have now acted to expand the eligibility of the Winter Fuel Payment so no pensioner on a lower income will miss out. This will mean over three quarters of pensioners receiving the payment in England and Wales later this winter.”