There could be unfortunate news in store for one group, as HMRC targets one group of pensioners who could see their money being taken back automatically. HMRC’s new rule has been implemented, and as a result, money will go out almost as soon as it comes in. Now will be as good a time as any to get your financial ducks in a row, or you may also have to bid your money farewell. So, discover what the new rule entails, and why one group of pensioners in particular will be affected.

Bid farewell to your money in the most crucial times

It may be deemed the most wonderful time of the year, but as the festive spirit kicks off before the start of the holidays, concerns increase along with the seasonal cost-of-living price hikes. Seasonal demand, lower temperatures, and global supply chain disruptions typically impact the prices of:

Fuel
Energy
Food
Clothing
Recreation

This is why benefit schemes, especially the seasonal ones, have become increasingly popular in the UK. These schemes’ financial contributions allow people, and especially pensioners, to afford essentials despite the seasonally high cost of living.

Now, in what can only be seen as an oxymoron, a certain increase will decrease one group of pensioners’ benefits, as HMRC will automatically deduct this group’s benefit payments due to falling into a certain category. Will you be affected?

HMRC targets one group of pensioners

The queue has opened for the next round of payments, as millions of pensioners will benefit from the Winter Fuel Payment scheme once again. The first payments of up to £300 were officially distributed on 1 November, with more to come. However, new rules and regulations will result in several pensioners no longer qualifying for Winter Fuel Payments. As a result, the money will be automatically taken back.

Usually, pensioners who were born before 22 September 1959 will automatically qualify for the Winter Fuel Payment scheme’s benefits. According to a report by Echo, even if you met the age requirement during the qualifying week, which was from 15 September to 21 September, you could lose your Winter Fuel Payment if:

You earn a taxable annual income of more than £35,000

Money will be automatically taken back

If you fall into the aforementioned category, you will still receive the payment, but HMRC will automatically take back your Winter Fuel Payment through the tax system. HMRC will recover your payment by:

Changing your tax code for the 2026/2027 tax year
Adding the Winter Fuel Payment amount to your Self Assessment tax return

You have the choice to opt out of Winter Fuel Payments to avoid unnecessarily losing money. Considering that the new State Pension will increase by 4.8% in April 2026, this may be the wiser choice, as more people will receive more money and inevitably lose out on the payments anyway. Unfortunately, the deadline to opt out for the 2025/2026 period has passed, but you still have the option to opt out for the 2026/2027 winter period.

You always have the choice to opt in again, should you change your mind. This can be done by contacting the Winter Fuel Payment Centre. Take note, if you want to receive a payment again, you must contact the centre by 31 March 2026.

Change is inevitable, but with so many changes in so little time, tracking your benefits this season will be no feat, especially as so many new rules and regulations are being introduced. Seeing as the UK Government has been keeping busy, you can keep your financial ducks in a row by keeping informed of all the new rules and regulations, especially after the Department for Work and Pensions (DWP) has confirmed the five groups who will be “ineligible” for Winter Fuel Payments until 2026.

Disclaimer: This article is for informational purposes only and does not constitute tax advice. It does not replace HMRC’s guidance or official notices. To confirm your eligibility or payment status, click the HMRC‑linked resources in our article or log in to your HMRC online account; for personalised advice, consult a qualified tax professional.